Quantum Cournot equilibrium for the Hotelling-Smithies model of product choice (1202.2283v1)

Abstract: This paper demonstrates the quantization of a spatial Cournot duopoly model with product choice, a two stage game focusing on non-cooperation in locations and quantities. With quantization, the players can access a continuous set of strategies, using continuous variable quantum mechanical approach. The presence of quantum entanglement in the initial state identifies a quantity equilibrium for every location pair choice with any transport cost. Also higher profit is obtained by the firms at Nash equilibrium. Adoption of quantum strategies rewards us by the existence of a larger quantum strategic space at equilibrium.