Playlist of game theory videos:
Game Theory, Dominant Strategies
Toy Games and Nash Equilibrium
Nash Equilibrium: formal definition; fixed point of best response correspondence
Extensive form games and subgame perfection
Hold-up game; Stackelberg outcome in duopoly
Economics 300 playlist
Economics without Graphs
Concepts: Uncertainty, Lotteries, Expected value vs. expected utility, Risk aversion
Note: At about 1:25 in the second video, 1/6 should be 1/2 (so that the probabilities add up to 1). The same 1/6 should be replaced with 1/2 in the calculations that follow.
For class: Bring an example of a decision you have made (large or small) that involved uncertainty. Can you model it as a choice between lotteries (or a certain outcome and a lottery)? Is there more than one way to model it as a lottery? How did you find the probabilities of the outcomes? What about the payoffs? Do you think you showed risk aversion with your choice?
Concepts: Definition of a game, Dominant strategy, Prisoner’s dilemma
For class: Bring an example of a strategic situation that you have encountered. Describe it as a game. Do any of the players have any dominant strategies? In addition, bring an example of a game that you believe is a prisoner’s dilemma (but not the classic example involving prisoners). Your game could be from everyday interactions, or something you read in the news recently–or anything else. Your game may involve more than two players.