![]() Similarly, firm 2 has a best response function where the price of firm 2 is a function of the price of firm 1. If two firms compete in prices for instance, the best response in prices of firm 1 is expressed as an equation (referred to as the best response function) where the price of firm 1 is a function of the price of firm 2. ![]() In mathematical game theory models, the best response is expressed in an equation where the optimal value of one player’s decision value is a function of the decision value of the other(s). Based on the target the agent is trying to achieve, we can determine the agent’s best response to any strategy of the other agent(s).
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