Summary
Keywords
Full Transcript
Game Theory 101: The Complete Textbook on Amazon: https://www.amazon.com/Game-Theory-101-Complete-Textbook/dp/1492728152/ http://gametheory101.com/courses/game-theory-101/ This lecture begins our adventure through sequential games, in which players take turns moving. Not all Nash equilibria are sensible in this context, so we introduce a new concept: subgame perfect equilibrium. A subgame perfect equilibrium requires all actions to be Nash equilibria in every subgame of the larger game. In essence, this requires all threats players make to be credible. We consider a game between two firms deciding whether to enter a market and engage in a price war. Can a monopolist's threat to launch a price war convince a challenger to stay out of the market?
Continue this lesson in the app
Install CourseHive on Android or iOS to keep learning while you move.
