buy ice cream from Seller 1). If both sellers are in the same location, they split the market. (a) Set-up a matrix for a game in which sellers have one of three options: (i) locating at 0, (ii) locating at 1/2, or (iii) locating at 1; and write down the associated payoffs.
buy ice cream from Seller 1). If both sellers are in the same location, they split the market. (a) Set-up a matrix for a game in which sellers have one of three options: (i) locating at 0, (ii) locating at 1/2, or (iii) locating at 1; and write down the associated payoffs.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![Consumers are located uniformly across the
street, with their location ranging between 0
and 1. There are two apple sellers in the
market (Seller 1 and Seller 2) who must decide
where to locate their shops. Consumers
prefers to travel a shorter distance to a seller:
(i.e. if Seller 1 is located at 0.3 and Seller 2 is
located at 0.8, a consumer located at 0.5 will
buy ice cream from Seller 1). If both sellers are
in the same location, they split the market. (a)
Set-up a matrix for a game in which sellers
have one of three options: (i) locating at 0, (ii)
locating at 1/2, or (iii) locating at 1; and write
down the associated payoffs.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7323b587-a2c2-4639-a4fc-3ac46152c870%2F8f9fa052-4e72-4806-ba68-f642a612a6ad%2Fb44vyr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consumers are located uniformly across the
street, with their location ranging between 0
and 1. There are two apple sellers in the
market (Seller 1 and Seller 2) who must decide
where to locate their shops. Consumers
prefers to travel a shorter distance to a seller:
(i.e. if Seller 1 is located at 0.3 and Seller 2 is
located at 0.8, a consumer located at 0.5 will
buy ice cream from Seller 1). If both sellers are
in the same location, they split the market. (a)
Set-up a matrix for a game in which sellers
have one of three options: (i) locating at 0, (ii)
locating at 1/2, or (iii) locating at 1; and write
down the associated payoffs.
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