EOS equatio s

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Last updated 8:32 PM on 6/4/26
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7 Terms

1
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Centralization utility

Ui = 1 − α |1/2 − i| − C

2
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Decentralization utility

For people in the left region:

Ui = 1 − α |1/4 − i| − 2C

For people in the right region:

Ui = 1 − α |3/4 − i| − 2C

3
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Optimal decentralization

C ≤ α / 4

4
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Hotelling Model Customer Utility

Ui = v - p - tdi

5
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Hotelling Model Indifferent Consumer Condition

p1 + tx = p2 + t(1 - x)

6
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Hotelling Model Equilibrium Price

p* = c + t

7
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Cartel sustainability equation

a/1-p >= b + [c*p/1-p]

a = cooperation value

b = cheating value

c = punishment value