Fred Foldvary wrote: > MVT posits a bell-shaped distribution of political views.
No, it doesn't. A uniform distribution works just as well. >Comes a third vendor. If he is in the center, each now gets 1/3 the sales. >If one vendor moves just a bit away, he gets 1/2 while the others get 1/4. >So a second vendor too moves a bit the other way. The middle vendor, left >with little share, now moves a bit further towards one end than one of the >other 2. The equilibrium will be that they will spread themselves so that >each gets 1/3 of the sales, 1/6 on either side. This is incorrect. There is no pure strategy equilibrium with three players. [See, for example, Gibbons "A Course in Game Theory", or Mas-Colell, Whinston and Green "Microeconomic Theory"] There is, of course, a mixed strategy equilibrium. Alex Robson ANU
