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Game Theory

Yale,, Fall 2007 , Prof. Ben Polak

Updated On 02 Feb, 19

Overview

Introduction - Putting yourselves into other peoples shoes - Iterative deletion and the median-voter theorem - Best responses in soccer and business partnerships - Nash equilibrium: bad fashion and bank runs - Nash equilibrium: dating and Cournot - Nash equilibrium: shopping, standing and voting on a line - Nash equilibrium: location, segregation and randomization - Mixed strategies in theory and tennis - Mixed strategies in baseball, dating and paying your taxes - Evolutionary stability: cooperation, mutation, and equilibrium - Evolutionary stability: social convention, aggression, and cycles - Sequential games: moral hazard, incentives, and hungry lions - Backward induction: commitment, spies, and first-mover advantages - Backward induction: chess, strategies, and credible threats - Backward induction: reputation and duels - Backward induction: ultimatums and bargaining - Imperfect information: information sets and sub-game perfection -Subgame perfect equilibrium: matchmaking and strategic investments - Subgame perfect equilibrium: wars of attrition - Repeated games: cooperation vs. the end game - Repeated games: cheating, punishment, and outsourcing - Asymmetric information: silence, signaling and suffering education - Asymmetric information: auctions and the winner

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Lecture 2: Putting yourselves into other peoples shoes

4.1 ( 11 )

Lecture Details

At the start of the lecture, we introduce the "formal ingredients" of a game the players, their strategies and their payoffs. Then we return to the main lessons from last time not playing a dominated strategy; and putting ourselves into others shoes. We apply these first to defending the Roman Empire against Hannibal; and then to picking a number in the game from last time. We learn that, when you put yourself in someone elses shoes, you should consider not only their goals, but also how sophisticated are they (are they rational?), and how much do they know about you (do they know that you are rational?). We introduce a new idea the iterative deletion of dominated strategies. Finally, we discuss the difference between something being known and it being commonly known.