Game Theory 101 Full Course - Game Theory 101 (#18): How NOT to Write a Subgame Perfect Equilibrium

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13.5 hours of video
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Keywords

game theory 101 backward induction introduction subgame perfect equilibrium economics political science

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/ A subgame perfect equilibrium is a complete and contingent plan of action. It must tell us what happens both on and off the equilibrium path. If it only says what happens on the equilibrium path, then we have no perspective on why taking the strategies that lead to that particular outcome is wiser than selecting an alternative strategy. This lecture explains how to avoid losing easy points by making such a mistake.