A Comparison of Treatments of a Duopoly Situation.

£1,500 · Offered by Maggs Bros Ltd

The first separate appearance of Nash’s article co-authored with then Princeton graduate students John Mayberry and Martin Shubik, an important early application of Nash’s bargaining solution in which Nash equilibrium is shown to generalise the classical Cournot duopoly equilibrium. Martin Shubik would later reflect on the collaboration in an article published the History of Political Economy journal: ‘Nash, Shapley, and I roomed close to each other at the Graduate College at Princeton and there was considerable interaction between us. In particular we all believed that a problem of importance was the characterization of the concept of threat in a two-person game and the incorporation of the use of threat in determining the influence of the employment of threat in a bargaining situation. We all worked on this problem, but Nash managed to formulate a model of the two-person bargain utilizing threat moves to start with. This was published in Econometrica (Nash 1953).’ ‘Prior to this work Nash had already done his important work on equilibrium points in n-person games in strategic form (Nash 1950). As I had read Cournot’s work, I recognized that this was a great generalization of a concept that already existed in economics, the Cournot equilibrium point. Somewhat later, after Nash had completed the cooperative game model, he and I and John Mayberry collaborated in applying both the noncooperative and the cooperative models to duopoly with quantity strategies, such as Cournot mod

• Year: 1953

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