theory to understand papers that use it‚ and o develop game-theoretical models yourselves • the focus is on solution concepts o theory o exercises o a few applications o Crombez: Applied Game Theory. 4 Contents • Basic equilibrium concepts Nash equilibria o Subgame perfection o Sequential equilibria • Applications o Bargaining o Entry deterrence o Repeated games o Crombez: Applied Game Theory. 5 Practicalities • Five meetings • Text Book: Kreps‚ A Course in Microeconomic Theory
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1. Nash equilibrium is where one player maximizes his payoff and the other doesn’t. is where each player maximizes his own payoff given the action of the other player. is where both players are maximizing their total payoff. is a unique prediction of the likely out-come of a game. Use the following to answer Questions 2–4: Consider the following information for a simultaneous move game: Two discount stores (mega-store and superstore) are interested in expanding their market share through advertising
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Econ 302 Exam 2 McLeod Name (please print): __________________________________________________________ Penn State ID #: __________________________________________________________ Please write all answers in the spaces provided. Please show your work in order to receive any partial credit on this exam. 1. (16 points) Suppose a firm has a production function given by Q = L1/2K1/2. Therefore
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(Altruistic preferences) 1 Exercise 6.1 (Alternative representations of preferences) 1 2 Nash Equilibrium 3 Exercise 16.1 (Working on a joint project) 3 Exercise 17.1 (Games equivalent to the Prisoner’s Dilemma) 3 Exercise 20.1 (Games without conflict) 3 Exercise 31.1 (Extension of the Stag Hunt) 4 Exercise 34.1 (Guessing two-thirds of the average) 4 Exercise 34.3 (Choosing a route) 5 Exercise 37.1 (Finding Nash equilibria using best response functions) 6 Exercise 38.1 (Constructing best response functions)
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enterprise networks. Firstly‚ the definition and modeling algorithm of Stochastic Game Nets are given. And then we apply the Stochastic Game Nets method to describe the attack and defense course in the enterprise networks successfully‚ and find a Nash equilibrium. Finally we analyze the confidentiality and integrity of the enterprise network quantificationally based on the model. The method can also be applied to other areas with respect to a game. Keywords- Stochastic Game Net‚ Enterprise Network
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economic analysis predicts. So they assumed collusion and prosecuted‚ not just once but several times. In fact‚ as Ghemawat ’s research shows‚ the firms tried to collude but couldn ’t manage! Why? The firms were looking for a pure-strategy Bertrand Nash-equilibrium‚ which doesn ’t exist‚ leading instead to so-called ‘Edgeworth cycles’. This Bertrand game has only mixed-strategy NE (like the river-crossing game)‚ just as Ghemawat’s data on the turbine generator case suggest. Therefore‚ the firms
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Introduction to the Bertrand Model The Bertrand model was developed by Joseph Bertrand to challenge Cournot’s work on non-cooperative oligopolies. Cournot’s model dealt with an N number of firms who will choose a specific quantity of output where price is a known decreasing function of total output. (About.com 2011) However‚ Bertrand’s argument was with regard to the setting of prices. He said the only factors influencing the price in an oligopolistic market were the firms themselves and therefore
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Adam Morrone Mr. Cone Introduction to Phycology 12‚ September 2012 Evaluating the condition of John Nash John Nash is the main character in the film A Beautiful Mind. Nash suffers from extreme schizophrenia and this radically affects his relationships with everyone around him. His wife‚ Alicia‚ must deal with the brunt of this‚ even before his condition was realized she would not often see him due to the fact that his hallucinations would keep him away from home for hours. When his schizophrenia
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rational choice 4 1.3 Coming attractions 7 Notes 8 3 I 2 Games with Perfect Information 9 Nash Equilibrium: Theory 11 2.1 Strategic games 11 2.2 Example: the Prisoner’s Dilemma 12 2.3 Example: Bach or Stravinsky? 16 2.4 Example: Matching Pennies 17 2.5 Example: the Stag Hunt 18 2.6 Nash equilibrium 19 John F. Nash‚ Jr. 20 Studying Nash equilibrium experimentally 22 2.7 Examples of Nash equilibrium 24 Experimental evidence on the Prisoner’s Dilemma 26 Focal points 30 2.8 Best response functions
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“Perhaps it is good to have a beautiful mind‚ but an even greater gift is to discover a beautiful heart.” - John Forbes Nash Jr. Those wise words that John Nash spoke a few years back still resonate today. The story starts at Princeton University‚ where John Nash is the recipient of a scholarship. (The Carnegie Prize for mathematics.) Then we are introduced to his roommate Charles‚ a literature student‚ he greets John and they instantly hit it off and become friends. John also meets an interesting
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