Ch28Game Theory I(中级微观经济学-清华大学,钟笑寒).ppt

Chapter Twenty-Eight Game Theory: I A Prelude : Games and Chinese Wisdoms 田忌赛马 借刀杀人 (Make use of other person to get rid of an enemy) 暗渡陈仓 (do one thing under cover of another) 破釜沉舟 (Burn one’s boats/bridge) 不战而屈人之兵 一报还一报 (Tit for Tat) 空城计(presenting a bold front to conceal a weak defence) Types of Games and Concepts of Equilibrium Game Theory I: Contents Simultaneous Games: 28.1 Dominant Strategies: 28.1 Best Response Curves: 29.1 Nash Equilibrium: 28.2 Mixed Strategies: 28.3, 29.2 Game Theory I: Contents Examples – Games of coordination: 28.4, 29.3 Battle of the sexes Assurance Games Chicken Boxed pigs (Table 29.9) Prisoner’s dilemma Examples – Games of Competition: 29.4 *Examples – Games of Coexistence: 29.5 Game Theory II: Contents Sequential Games: 28.7 *Strategies, Normal Form and Nash Equilibrium: 28.7 Extensive form: 28.7 *Subgames and Subgame Perfect Nash Equilibrium (SPNE) Game Theory II: Contents Examples – Games of Commitment: 28.8, 29.6 Entry Deterrence Kindly Kidnapper Saving and Social Security *Soft Budget Constraints: Dewatripont and Maskin (1995) Examples – Bargaining: 29.7 Repeated Games and Enforcing Cartel: 28.5, 28.6, 27.11. Game Theory Game theory models strategic behavior by agents who understand that their actions affect the actions of other agents. Some Applications of Game Theory The study of oligopolies (industries containing only a few firms) The study of cartels; e.g. OPEC The study of externalities; e.g. using a common resource such as a fishery. The study of military strategies. Simultaneous-Move Gamesand Sequential Games In this class, we study simultaneous-move games, in which all players move only once and at the same time. In next class, we study sequential games, where one player gets to move first and the other player responds, and they can move more than once. What is a Game? (!) A (Normal-form) game consists of a set of players: 1,2,…,I. a set of strategies for each player, Si={si}, for any i. the payoffs to each pla