Assume you have your car broken down just before the weekend. You value your weekend trip as much as v and if you have to stay home you get the zero utility. There are two dealerships in your town. At the beginning of the day they simultaneously choose a price for repair. Dealers know that when you come to one of them and observe the price, you can always call to another dealer to make an inquiry about his price. The call is costless. The other dealer, however, can be occupied for this day. Assume, this happens with probability which is a common knowledge (but the dealers do not know whether the other dealer is occupied or not). Assume zero repair cost for the dealer and find a symmetric equilibrium of the game.
Assume you have your car broken down just before the weekend. You value your weekend trip as much
as v and if you have to stay home you get the zero utility. There are two dealerships in your town. At
the beginning of the day they simultaneously choose a price for repair. Dealers know that when you come
to one of them and observe the price, you can always call to another dealer to make an inquiry about his
price. The call is costless. The other dealer, however, can be occupied for this day. Assume, this happens
with probability which is a common knowledge (but the dealers do not know whether the other dealer is
occupied or not). Assume zero repair cost for the dealer and find a symmetric equilibrium of the game.
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