Timeline for Plotting best-response functions
Current License: CC BY-SA 3.0
7 events
| when toggle format | what | by | license | comment | |
|---|---|---|---|---|---|
| Aug 3, 2012 at 5:59 | comment | added | Verbeia |
I am not a microeconomist so I haven't worked on such things lately, but the non-convexity isn't needed. I was able to get a triple equilibria with this pair of functions: Plot[{Exp[-x - 0.25] + 0.1, Exp[-(0.9 x^(1/2))]}, {x, -1, 12}, PlotRange -> {0, 2}]. Their derivatives need to be equal at two points, so what you are looking for is convex functions (first derivative negative, second derivative positive) where the second derivative crosses.
|
|
| Aug 2, 2012 at 18:55 | comment | added | medical_researcher_sf | Thanks, @kguler! Very helpful to be able to manipulate all the parameters. It seems like you've done this before? If so, do you happen to know, off the top of your help, any good functional forms that lead to multiple equilibria like the above? Specifically, we're looking for multiple equilibria where prices are more symmetric across firms, such as a (low, low) and (high, high) pair of equilibria (with an unstable one in the middle). I can get that with this parameterization, but any other recommendations would be appreciated. | |
| Aug 2, 2012 at 18:51 | vote | accept | medical_researcher_sf | ||
| Aug 2, 2012 at 17:12 | history | edited | kglr | CC BY-SA 3.0 |
deleted 19 characters in body
|
| Aug 2, 2012 at 16:41 | history | edited | kglr | CC BY-SA 3.0 |
added 246 characters in body
|
| Aug 2, 2012 at 16:24 | history | edited | kglr | CC BY-SA 3.0 |
added 856 characters in body
|
| Aug 2, 2012 at 16:06 | history | answered | kglr | CC BY-SA 3.0 |