Evaluate an informational equilibrium
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Q: A seller and a buyer have a hierarchy of mutual beliefs about the price of a product. They should negotiate the price to make the deal. Construct the corresponding model. Evaluate an informational equilibrium.
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There exist two agents with the cost functions ci(yi) = yi2/(2ri), i = 1, 2. The principal's income func- tion represents the sum of agents' actions.
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A seller and a buyer have a hierarchy of mutual beliefs about the price of a product. They should negotiate the price to make the deal.
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