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Backwards-induction outcome in a quantum game

A. Iqbal, A. H. Toor

quant-pharXiv:quant-ph/0111090

Abstract

In economics duopoly is a market dominated by two firms large enough to influence the market price. Stackelberg presented a dynamic form of duopoly that is also called `leader-follower' model. We give a quantum perspective on Stackelberg duopoly that gives a backwards-induction outcome same as the Nash equilibrium in static form of duopoly also known as Cournot's duopoly. We find two qubit quantum pure states required for this purpose.

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