Examples and exercises on finding Nash equilibria of two-player games using best response functions



Consider the strategic game in which

What are the Nash equilibria?

We conclude that the game has a unique Nash equilibrium, in which each firm's amount of advertising is c.


Each of two countries chooses a tariff rate to impose on imports. If country 1 chooses the rate t1 and country 2 chooses the rate t2 then country 1's payoff is
u1(t1t2) = t1(t1  t2  2)
and country 2's payoff is
u2(t1t2) = t2(t2  t1  8).
Find the Nash equilibria of the strategic game that models this situation.


Copyright © 1997 by Martin J. Osborne