Quantum Model of Bertrand Duopoly

  • Received Date: January 25, 2010
  • Published Date: July 31, 2010
  • We present a 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 find only one Nash equilibirum point for the maximally entangled initial state. The 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.
  • Article Text

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