Evolutionary game theory. (Lecture 11)

Outline

Auctions
Common value auctions
All-pay auctions
Review of seminar 2
Revision slides

Structure

Economic decision problem

Model

Analysis

Theory

Classify, choose representation
to model, sequential, repeated
etc.

Select tools to

Lecture 1-2

Classification

Simultaneous games, 2 players

Representation

Concept

Process

Lesson

Normal form (payoff table)

Pure NE
Cooperation

NE= likely outcome
NE

Lecture 3

Classification

Simultaneous games, 2 players

Representation

Concept

Process

Lesson

Normal form (payoff table)

Mixed NE

Randomness
Indifference

Solve π(a)=π (b)

Lecture 4-5

Classification

Sequential

Representation

Concept

Process

Lesson

Extensive form (game tree)

SPE
Coordination

Order matters
Strategic moves

Backward induction

Lecture 6

Classification

Repeated games (vs one-shot games)

Representation

Concept

Process

Lesson

Normal form

Trigger strategies
Cooperation

Importance of r
TFT
Cournot and

Lecture 7

Classification

Evolutionary games

Representation

Concept

Process

Lesson

Normal form

ESS

Justification for NE
Some NE are not ESS

Solve

Lecture 8-9

Classification

Asymmetric information

Representation

Concept

Process

Lesson

Diverse

Information manipulation

Cheap talk may or may not work
Importance

Lecture 10-11

Classification

Auctions

Representation

Concept

Process

Lesson

Bid scale

Winning bid

Revenue equivalence
Winner’s curse

Optimal bid

Exam
Section A: 5 compulsory questions, at most 3 "mathematical/analytical" questions. (10

Past paper (2014-15)

6. In games of cooperation, explain how the repetition of

Section A

1 conceptual question:
e.g. explain the meaning of mixed strategies