Equilibria in a competitive model arising from linear production situations with a common-pool resource

Equilibria in a competitive model arising from linear production situations with a common-pool resource

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Article ID: iaor20172941
Volume: 25
Issue: 2
Start Page Number: 394
End Page Number: 401
Publication Date: Jul 2017
Journal: TOP
Authors:
Keywords: simulation, game theory, supply & supply chains
Abstract:

In this paper we deal with linear production situations in which there is a limited common‐pool resource, managed by an external agent. The profit that a producer can attain depends on the amount of common‐pool resource obtained through a certain procedure. We contemplate a competitive process among the producers and study the corresponding non‐cooperative games, describing their (strict) Nash equilibria in pure strategies. It is shown that strict Nash equilibria form a subset of strong Nash equilibria, which in turn form a proper subset of Nash equilibria.

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