Cournot Competition | Microeconomics by Game Theory 101

This lecture introduces simultaneous competition over quantities. Two firms in duopolistic competition choose how much of a homogeneous good to produce. The total quantity produced determines the price, and firms attempt to maximize their profits.

We work through the solution as a three step process:

1) Deriving the first firm's best response
2) Deriving the second firm's best response
3) Finding a pair of quantities that are a mutual best response

The quantities found in the third step are the equilibrium of the game.

0:00 Introduction
0:37 Cournot Model Setup
5:36 Solution Strategy
7:41 Deriving the Best Response Functions
13:53 Solving the Equilibrium

Видео Cournot Competition | Microeconomics by Game Theory 101 канала William Spaniel