Содержание
- 2. What makes a business successful? Providing a service that customers like Building partnerships Being ahead of
- 3. What is game theory? ...a collection of tools for predicting outcomes of a group of interacting
- 4. What is game theory? Study of interactions between parties (e.g. individuals, firms) Helps us understand situations
- 5. The Game: Strategic Environment Players Everyone who has an effect on your earnings (payoff) Actions: Choices
- 6. Strategic Thinking Example: Apple vs. Samsung Apple’s action depends on how Apple predicts Samsung’s action. Apple’s
- 7. The Assumptions Rationality Players aim to maximize their payoffs, and are self-interested. Players are perfect calculators
- 8. History of game theory 1928, 1944: John von Neumann 1950: John Nash 1960s: Game theory used
- 9. Lectures 1-3: Simultaneous games Nash equilibrium Oligopoly Mixed strategies 4-5: Sequential games Subgame perfect equilibrium Bargaining
- 10. Lectures 7: Evolutionary games How do players “learn” to play the Nash equilibrium 8-9: Incomplete information
- 11. Assessment Assessment consist is a final exam: 100% exam 2-hour Section A: 5 compulsory questions, at
- 12. SIMULTANEOUS GAMES WITH DISCRETE CHOICES PURE STRATEGY NASH EQUILIBRIUM
- 13. Simultaneous games with discrete choices A game is simultaneous when players choose their actions at the
- 14. Strategic Interaction Players: Reynolds and Philip Morris Payoffs: Companies’ profits Strategies: Advertise or Not Advertise Strategic
- 15. Representing a Game (strategic form / normal form) What is the likely outcome? We want a
- 16. Solving the game: Nash equilibrium The Nash equilibrium, is a set of strategies, one for each
- 17. Solving the Game Can (No Ad,No Ad) be a Nash equilibrium? No, 60>50 Can (No Ad,Ad)
- 18. Solving the Game Can (Ad,Ad) be a Nash equilibrium? YES: 30>20 If Philip Morris “believes” that
- 19. Equilibrium vs. optimal outcome The optimal outcome is the one that maximizes the sum of all
- 20. Game of cooperation (prisoner’s dilemma) Players can choose between cooperate and defect. The NE is that
- 21. Nash equilibrium existence Q: Does a NE always exist? A: Yes (in almost every cases). [If
- 22. Nash equilibrium A formal definition Any social problem can be formalized as a “game,” consisting of
- 23. Nash equilibrium A formal definition Definition: A Nash Equilibrium is a profile of strategies such that
- 24. How to find the Nash equilibrium? There are two techniques to find the NE Successive elimination
- 25. Elimination of dominated strategies (1st method) Procedure: eliminate, one by one, the strategies that are strictly
- 26. Elimination of dominated strategies
- 27. Elimination of dominated strategies The order in which strategies are eliminated does not matter. Select any
- 28. Elimination of dominated strategies
- 29. Elimination of dominated strategies Up dominates (>)Down. Now that Down is out, Middle>Left. Now that Left
- 30. Weak dominance Strategy A weakly dominates strategy B if its strategy A’s payoff is in some
- 31. Weak dominance Weakly dominated strategies cannot be eliminated. In some cases, when strategies are only weakly
- 32. Best response analysis (2nd method) Procedure: For each possible strategy, draw a circle around the best
- 33. Best response analysis
- 34. Exercise
- 35. Comparing the two methods The two methods for finding the NE are NOT equivalent. The best
- 36. Comparing the two methods Example of an entry game: Two businesses must choose which market to
- 37. Comparing the two methods 1st method: The game is not dominance solvable, there are no dominated
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