国外博弈论课件lecture4.ppt

May 22, 2003 73-347 Game Theory--Lecture 4 May 22, 2003 Lecture 4 Static (or Simultaneous-Move) Games of Complete Information Concave Function and Maximization Cournot models of duopoly and oligopoly Outline of Static Games of Complete Information Introduction to games Normal-form (or strategic-form) representation Iterated elimination of strictly dominated strategies Nash equilibrium Review of concave functions, optimization Applications of Nash equilibrium Mixed strategy equilibrium Agenda Review of previous classes Concave functions Solving maximization problem Cournot models of duopoly and oligopoly Review: iterated elimination of strictly dominated strategies If a strategy is strictly dominated, eliminate it The size and complexity of the game is reduced Eliminate any strictly dominated strategies from the reduced game Continue doing so successively Definition: Nash Equilibrium Nash equilibrium survive iterated elimination of strictly dominated strategies The strategies that survive iterated elimination of strictly dominated strategies are not necessarily are Nash equilibrium strategies Summary In an n-player normal-form game, if iterated elimination of strictly strategies eliminates all but the strategies ( s1*, s2*, ..., sn*), then ( s1*, s2*, ..., sn*) is the unique Nash equilibrium. In an n-player normal-form game, if the strategies ( s1*, s2*, ..., sn*) is a Nash equilibrium then they survive iterated elimination of strictly strategies. But the strategies that survive iterated elimination of strictly dominated strategies are not necessarily are Nash equilibrium strategies. Cournot model of duopoly A product is produced by only two firms: firm 1 and firm 2. The quantities are denoted by q1 and q2, respectively. Each firm chooses the quantity without knowing the other firm has chosen. The market priced is P(Q)=a-Q, where a is a constant number and Q=q1+q2. The cost to firm i of producing quantity qi is Ci(qi)=cqi. Cournot model of duopoly The normal-f