We present the quantum model of Bertrand duopoly and study the entanglement behaviour on the profit functions of the firms. Using the concept of optimal response of each firm to the price of the opponent, we found four Nash equilibria for maximally entangled initial state. We have shown that only one point among the four Nash equilibria has valid physical meaning. The very presence of quantum entanglement in the initial state gives payoffs higher to the firms than the classical payoffs at the physically valid point for higher values of substitution parameter .
We present the quantum model of Bertrand duopoly and study the entanglement behavior on the profit functions of the firms. Using the concept of optimal response of each firm to the price of the opponent, we found only one Nash equilibirum point for maximally entangled initial state. The very presence of quantum entanglement in the initial state gives payoffs higher to the firms than the classical payoffs at the Nash equilibrium. As a result the dilemma like situation in the classical game is resolved .
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behaviour
behavior
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four Nash equilibria
only one Nash equilibirum point
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We have shown that only one point among the four Nash equilibria has valid physical meaning.
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physically valid point for higher values of substitution parameter
Nash equilibrium. As a result the dilemma like situation in the classical game is resolved