Economcs 21 Bentz X02 Topic4

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS
ECONOMICS 21
Dartmouth College, Department of Economics: Economics 21, Summer02 Summer02
Topic 4: Fun and Games

Economics 21, Summer 2002 Andreas Bentz Based Primarily on Shy Chapter 2 and Varian Chapter 27, 28
Review: Choices and Outcomes

Consumer theory:
From a given choice set (e.g. budget set), choose the option (e.g. bundle of goods) that you most prefer. Under certainty, the outcome of choice is certain.
Choose the option that has an outcome that maximizes utility.
Under uncertainty, the probability distribution over possible outcomes is known.
Choose the action (associated with a number of outcomes, where each occurs with given probability) that maximizes expected utility.
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Choices and Outcomes, contd

Producer theory - two extreme cases: Perfect competition:
From a range of possible prices, choose the price that maximizes profit. Under certainty, the outcome of choice is certain:

p > MC: zero demand, p < MC: negative profit, p = MC: zero profit.
Maximize expected profit (not covered).

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Choices and Outcomes, contd

Monopolist:
From the price-quantity pairs given by the demand curve, choose the one that maximizes profit. Under certainty, the outcome of choice is certain:
= p x q(p) - c(q(p))
Maximize expected profit (not covered).
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Choices against Nature

In these cases, choice is the choice of one agent, from a given set of alternatives that give certain (expected) utility (or profit). The agents choice is a game against nature:
The agent chooses an action (associated with a number of outcomes). Then nature chooses the outcome that actually occurs:

Under certainty, nature chooses the single outcome for sure. Under uncertainty, nature chooses one of the possible outcomes (with the probability of that outcome).
The agent cannot influence natures move in this game.

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Modeling Interaction
In general, in all social interaction, my choice of action influences your choice (because my action influences your payoff [utility, profit], and your action influences mine).
Example (duopoly): How I choose my price depends on how I expect you to choose your price, which depends on how you expect me to choose my price, which depends on how I expect you to choose because our profits depend on how we both choose prices.
We call these social encounters games.

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Game Theory
Game theory is the study of such games: social interactions between rational agents. All of economics is a branch of game theory
(Robert Aumann)
We have already analyzed some games:

In monopoly, there is no (real) interaction:
There is only one agent (and nature). The number of agents is so large that the action of one agent has no effect on the other agents payoffs. A (non-trivial) example of game-theoretic analysis.
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In perfect competition, there is no need to model interaction:
Principal-Agent analyses:
Game Theory
John von Neumann and Oskar Morgenstern (1944) Theory of Games and Economic Behavior
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A Classification of Games
Simultaneous move games (static games):
All players make their choices at the same time. Method of analysis: (usually) games in normal (or, strategic) form.
Sequential move games (dynamic games):

Some players make their choices first, then other players observe these choices and then make theirs, etc. Method of analysis: games in extensive form.
Normal Form Games

Simultaneous Move Games in Normal (Strategic) Form
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Normal Form Games

Definition: A normal form game (or, strategic form game) is defined by:
the set of players in the game; the strategies (actions) that are available to each player;
each player chooses one of her available strategies; a strategy profile is a list of the strategies chosen by each player;
the payoffs for each player, depending on the choice of action of every player;
i.e. each players payoff depends on the strategy profile.

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Analogy with parlor games: e.g. Pong.
Example: The Price War Game

Duopolists: player 1 (row), player 2 (column) Player 2: cut price cut price Player 1: dont cut (1, 1) (0, 3) dont cut (3, 0) (2, 2)
This normal form (or strategic form) of the game captures all the information needed.
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The Price War Game, contd

The normal form captures all the information the definition requires:
Players: {1, 2} Available strategies:

player 1: {cut price, dont cut} player 2: {cut price, dont cut}
Strategy profiles:

Payoffs: player 1 - player 2

1 3 0 2 1 0 3 2
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(cut price, cut price) (cut price, dont cut) (dont cut, cut price) (dont cut, dont cut)
Equilibrium in Games
What is our prediction for the play of a game?
Which strategies will agents choose? What is an appropriate definition of equilibrium in games?
What do we want from an equilibrium concept?

Existence: The equilibrium concept should yield a prediction for all games. Uniqueness: The equilibrium concept should yield a unique prediction of equilibrium play in all games.
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Dominant Strategies
Suggestion 1: If a player has some strategy that gives her a higher payoff than any other strategy she could choose, regardless of what the other players in the game do, she will choose that strategy. Such a strategy is called a dominant strategy.
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Dominant Strategies, contd

Equilibrium prediction: If every player has a dominant strategy, every player will choose that dominant strategy. Definition: An equilibrium in dominant strategies (or dominant strategy equilibrium) is a strategy profile in which every player chooses her dominant strategy. This is an intuitively appealing and robust equilibrium concept.
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What is the dominant strategy equilibrium? Player 2: cut price cut price Player 1: dont cut (1, 1) (0, 3) dont cut (3, 0) (2, 2)
The equilibrium strategy profile in dominant strategies is (cut price, cut price). In this equilibrium the payoffs are: (1, 1).
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Fun: Prisoners Dilemma Game

Relabelling players and strategies in the price war game, we get the prisoners dilemma game (political philosophy, politics): Prisoner 2: confess confess Prisoner 1: lie (1, 1) (0, 3) lie (3, 0) (2, 2)
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The Advertising Game

Duopolists 1 and 2 decide on advertising expenditure.
2: low med. low (1, 1) (0, 3) med. (3, 0) (1, 1) high (2, 0) (3, 0) high (0, 2) (0, 3) (1, 1)
1:
What is the dominant strategy equilibrium in this game?

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The Advertising Game, contd

In this game, no player has a dominant strategy.
There is no dominant strategy equilibrium.
What should our equilibrium prediction be?

(Most games do not have a dominant strategy equilibrium.)
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Nash Equilibrium
Suggestion 2: If there is a (potential equilibrium) strategy profile in which no player wishes to deviate unilaterally (i.e. choose a different strategy while all other players continue playing their (potential equilibrium) strategies), this will be the equilibrium of the game. Definition: An equilibrium in which no player wishes to deviate unilaterally is called a Nash equilibrium (John Nash, 1951).
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What is the Nash equilibrium in the price war game?
Player 2: cut price dont cut cut price Player 1: dont cut (1, 1) (0, 3) (3, 0) (2, 2)
Check each potential equilibrium strategy profile.

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Nash E. and Dominant Strategies

Proposition: Every dominant strategy equilibrium is also a Nash equilibrium. Proof: In a dominant strategy equilibrium, each player is playing the strategy that gives them the highest payoff regardless of what the other players do. Therefore, no player would want to deviate: all other strategies open to the players are worse. But: not every Nash equilibrium is a dominant strategy equilibrium.
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The Advertising Game, contd

What is the Nash equilibrium in the advertising game?
2: low med. low (1, 1) (0, 3) med. (3, 0) (1, 1) high (2, 0) (3, 0) high (0, 2) (0, 3) (1, 1)
1:
The unique Nash equilibrium strategy profile is (high, high).

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Existence of Nash Equilibrium

Proposition (Nash): A Nash equilibrium (possibly in mixed strategies) exists in every game. Mixed strategies are strategies where players randomize over strategies.
Example (mixed strategy): My advertising expenditure is: low with probability 0.3, medium with prob. 0.2, high with probability 0.5. This course does not cover mixed strategies.
Is the Nash equilibrium prediction unique?

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The Standards Game

Duopolists decide simultaneously on the standard for VCRs.
Sony (2): VHS Beta VHS JVC (1): Beta (2, 1) (0, 0) (0, 0) (1, 2)
What is the Nash equilibrium in this game? There are two Nash equilibria (in pure strat.).
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Fun: Battle of the Sexes Game

Lovers decide where to go on a Friday night:
Her: boxing ballet boxing Him: ballet (2, 1) (0, 0) (0, 0) (1, 2)
Although he prefers boxing, and she prefers ballet, each would rather be with the other than on their own.
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Nash Equilibrium and Uniqueness

Nash equilibria are not unique. Can we somehow trim down the number of Nash equilibria?
Thomas Schelling The Strategy of Conflict:
Some equilibria in co-ordination games such as the battle of the sexes game are salient. For instance, going wherever he prefers has been salient (is no longer?).
The overall conclusion is negative: there is no uncontested way of paring down the number of Nash equilibria.
Are multiple equilibria a feature of the world?

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Best Responses
Another way of thinking about Nash equilibria is in terms of best responses: Definition: A players best response to the strategies played by the other players, is the strategy that gives her the highest payoff, given the strategies played by the other players.
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Best Responses, contd

Example: the price war game: Player 2: cut price dont cut cut price Player 1: dont cut (1, 1) (0, 3) (3, 0) (2, 2)
1s best response to 2 playing (cut price) is: (cut price). 1s best response to 2 playing (dont cut) is: (cut price). 2s best response to 1 playing (cut price) is: (cut price). 2s best response to 1 playing (dont cut) is: (cut price).
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Best Responses, contd

Example: the standards game: Sony (2): VHS Beta VHS JVC (1): Beta (2, 1) (0, 0) (0, 0) (1, 2)
1s best response to 2 playing (VHS) is: (VHS). 1s best response to 2 playing (Beta) is: (Beta). 2s best response to 1 playing (VHS) is: (VHS). 2s best response to 1 playing (Beta) is: (Beta).
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Nash and Best Responses

Proposition: In a Nash equilibrium, every players equilibrium strategy is her best response to the other players equilibrium strategy. Proof: In a Nash equilibrium, no player wishes to deviate, given the other players continue to play their Nash equilibrium strategies. Therefore, her strategy must be the best response to the other players equilibrium strategies.
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Nash and Best Responses, contd

Example: the price war game:
1s best response to 2 playing (cut price) is: (cut price). 1s best response to 2 playing (dont cut) is: (cut price). 2s best response to 1 playing (cut price) is: (cut price). 2s best response to 1 playing (dont cut) is: (cut price).
Player 2: cut price cut price Player 1: dont cut (1, 1) (0, 3) dont cut (3, 0) (2, 2)
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Nash and Best Responses, contd

Example: the standards game:
1s best response to 2 playing (VHS) is: (VHS). 1s best response to 2 playing (Beta) is: (Beta). 2s best response to 1 playing (VHS) is: (VHS). 2s best response to 1 playing (Beta) is: (Beta).
Sony (2): VHS VHS JVC (1): Beta (2, 1) (0, 0) Beta (0, 0) (1, 2)
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Applications
between monopoly and perfect competition ...
Market Structure III: An Application

Simultaneous Price Setting: The Bertrand Game (1883) (Shy pp. 107-110)
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The Bertrand Game

The game:
Players:
two firms (duopolists), 1 and 2 players 1 and 2 set prices p1, p2 simultaneously players 1, 2 produce quantities y1, y2 of the same homogeneous product, each at constant marginal cost c inverse demand: p = a - bY, where Y = y1 + y2 assumption: if p1 < p2, then y1 = Y, y2 = 0 and vice versa assumption: if p1 = p2, then y1 = y2 = 1/2 Y
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Strategies:
Payoffs:
The Bertrand Game, contd

Payoffs, contd:

player is profit: i = piyi - cyi, or i = (pi - c)yi, where i = 1, 2 for player 1: player 1s profit when p1 < p2: 1 = (p1 - c) Y, i.e. 1 = (p1 - c) (a - p1)/b player 1s profit when p1 > p2: 1 = 0 player 1s profit when p1 = p2: 1 = (p1 - c) 1/2 Y, i.e. 1 = (p1 - c) 1/2 (a - p1)/b similarly for player 2.
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Solution: When prices can be chosen continuously, there is a simple and intuitive solution to the Bertrand game:
Can a price less than marginal cost be optimal?
No: profits are negative. Suppose player 1 were to charge a price above marginal cost. Then player 2 could just undercut player 1s price and take the entire market. Similarly for player 2.
Can a price greater than marginal cost be optimal?
The only price at which one player does not have to anticipate being undercut by the other player is price = marginal cost.
The Nash equilibrium strategy profile in the Bertrand game is for both players (i = 1, 2) to set pi = c.
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If oligopolists compete in prices (Bertrand competition), the outcome will be efficient: price = marginal cost.
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Market Structure IV: An Application

Simultaneous Quantity Setting: The Cournot Game (1838) (Shy pp. 98-101; Varian Ch 27)
The Cournot Game

The game:
Players:
two firms (duopolists), 1 and 2 players 1 and 2 set quantities y1, y2 simultaneously players 1, 2 produce quantities y1, y2 of the same homogeneous product, each at constant marginal cost c inverse demand: p = a - bY, where Y = y1 + y2
Strategies:
Payoffs:
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The Cournot Game, contd

Payoffs, contd:
firm 1s profit when it sets quantity y1 and firm 2 sets quantity y2: 1 (y1, y2) = p y1 - c y1, or: 1 (y1, y2) = (a - b(y1 + y2)) y1 - c y1, or: 1 (y1, y2) = ay1 - by12 - by2y1 - c y1, or: 1 (y1, y2) = - by12 + (a - by2 - c)y1. Similarly for firm 2: 2 (y1, y2) = - by22 + (a - by1 - c)y2.
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So:
Firm 1 profit: 1(y1, y2) = - by12 + (a - by2 - c)y1. Firm 2 profit: 2(y1, y2) = - by22 + (a - by1 - c)y2.
What is firm 1s best response (reaction) when firm 2 chooses y2?

Choose y1 to max 1 (y1, y2): 1(y1, y2) / y1 = - 2by1 + a - by2 - c = 0 that is: y1 = (a - by2 - c)/2b This is firm 1s best response (or reaction) function.
What is firm 2s best response function?

y2 = (a - by1 - c)/2b
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Recall: In a Nash equilibrium, every players equilibrium strategy is her best response to the other players equilibrium strategy. So we know that
y1 = (a - by2 - c)/2b and y2 = (a - by1 - c)/2b
are both true. Solve for y1:

y1 = (a - c)/3b y2 = (a - c)/3b
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f1(y2) - firm 1s best response (or, reaction) function
f2(y1) - firm 2s reaction function
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The Cournot Game: Equilibrium?

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The Cournot Game: Equilibrium!

Nash equilibrium
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The Cournot Game: Comparison

f1(y2) - firm 1s best response (or, reaction) function Perfect Competition (assuming linear demand and symmetry) Nash equilibrium in the Cournot game f2(y1) - firm 2s reaction function Monopoly solution (firm 1 is monopolist)
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If oligopolists compete in quantities (Cournot competition), the joint quantity is:
greater than the quantity in a monopoly, but less than the quantity under perfect competition (or under Bertrand competition).
Cournot Monopoly
Bertrand quantity P. C.
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Extensive Form Games

(Mostly) Sequential Move Games in Extensive Form
Example: The Entry Game

potential entrant (1) enter incumbent (2) fight (-1, -1) share (2, 2)
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stay out (0, 8)
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Extensive Form Games

Definition: An extensive form game is:
a game tree (one starting node, other decision nodes, terminal nodes, and branches linking each decision node to successor nodes); the set of players in the game; at each decision node, the name of the player making a decision at that node; the actions available to players at each node;
a players strategy is a list of actions of that player at each decision node where that player can take an action;
the payoffs for each player at each terminal node.

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Extensive Form Games, contd

Note:
We now need to be careful about the distinction: action - strategy:
An action at some decision node is a players decision of what to do when that node is reached. A strategy is a complete list of actions that a player plans to take at each decision node, whether or not that node is actually reached. Example (the entry game): if player 1 chooses to stay out, player 2s decision node is not reached.
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The Entry Game and Nash Eq.

What is the Nash equilibrium in the entry game? Recall: In a Nash equilibrium, no player wishes to deviate unilaterally.
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The Entry Game, contd

potential entrant (1) enter incumbent (2) fight (-1, -1) share (2, 2) stay out (0, 8) possible Nash equilibria: (enter, fight) (enter, share) (stay out, fight) (stay out, share) This game has two Nash equilibria (in pure strategies).
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We can convert this extensive form game into a normal (strategic) form game:
potential entrant (1) enter incumbent (2) fight (-1, -1) share (2, 2) stay out (0, 8)
normal (strategic) form:
fight enter stay out (-1, -1) (0, 8)
share (2, 2) (0, 8)
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One of the two Nash equilibria in the entry game is unreasonable: (stay out, fight)
The potential entrant only stays out because, if she were to enter, the incumbent threatens to fight. But consider what would happen if the entrant did enter: once she has entered (i.e. once we are at player 2s decision node), the incumbent would want to share the market (i.e. not fight). This Nash equilibrium is based on a non-credible threat. This (overall) equilibrium is unreasonable because, once play of the game has reached player 2s decision node, subsequent play (i.e. play in the subgame that starts at player 2s decision node) is not an equilibrium.
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Multiple Nash Equilibria

In extensive form games we can sometimes eliminate unreasonable Nash equilibria.
Remember: we want a unique prediction for the play of the game.
We only admit reasonable Nash equilibria:

We want equilibrium play in a game to be such that each players strategies are an equilibrium not only in the overall game, but also at every decision node, for the subsequent game (the subgame starting at that decision node).
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Subgame Perfect Equilibrium

Definition: A subgame is the game that starts at one of the decision nodes of the original game; i.e. it is a decision node from the original game along with the decision nodes and terminal nodes directly following this node. Definition: A Nash equilibrium with the property that it induces equilibrium play at every subgame is called a subgame perfect equilibrium.
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potential entrant (1) enter incumbent (2) fight (-1, -1) share (2, 2) stay out (0, 8) 1. What is the equilibrium in the subgame starting at player 2s decision node? 2. Once we know this, what is the equilibrium in the subgame starting at the starting node?
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There is a unique subgame perfect equilibrium in the entry game. Subgame perfection may help us trim down the number of Nash equilibria in sequentialmove games in extensive form. Subgame perfection is the solution concept we will use for sequential-move games in extensive form.
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Backward Induction
A method for finding subgame perfect equilibria is backward induction.
A subgame perfect equilibrium is a specification of all players strategies such that play in every subgame is a (Nash) equilibrium for that subgame. In particular, this is true for the final subgame(s). So we know what happens in the final subgame: we can replace that subgame by the payoff that will be reached in that subgame. Then proceed similarly in this new reduced game, until there is only one subgame left.
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Backward Induction, contd

potential entrant (1) enter incumbent (2) fight (-1, -1) share (2, 2) stay out (0, 8)
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Market Structure V: An Application

Entry Deterrence Dixit (1982) AER
Entry Deterrence
Entry deterrence: the incumbent takes an action that influences payoffs such that she can commit to the threat of fighting a new entrant.
Remember: in the entry game, the threat to fight was noncredible, and was therefore eliminated by subgame perfection.
Suppose before playing the entry game, the incumbent can choose to incur a cost in readiness to fight a price war.
Suppose this cost does not reduce payoffs if there is a price war, but does reduce costs if there is no price war. (In our example, this cost is 4.)
What is the subgame perfect equilibrium?

Solve by backward induction.
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The Entry Deterrence Game

incumbent (2) committed potential entrant (1) enter stay out incumbent (2) fight (-1, -1) share (2, -2) (0, 4) passive potential entrant (1) enter stay out incumbent (2) fight (-1, -1) share (2, 2)
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(0, 8)
Entry Deterrence Game, contd

The entry deterrence game in our example has a unique subgame perfect equilibrium: (stay out [at B], enter [at C]; committed [at A], fight [at D], share [at E]).
(Remember: a players strategy lists an action for each of that players decision nodes.)
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Entry Deterrence Game, contd

We can convert this game into a normal (strategic) form game:
A
committed incumbent (2) passive
B
enter
potential entrant (1) stay out (0, 4)
C
enter
potential entrant (1) stay out (0, 8)
player 1: enter (B), enter (C) enter (B), stay out (C) stay out (B), enter (C) stay out (B), stay out (C)
etc.
incumbent (2) fight (-1, -1) share (2, -2)
incumbent (2) fight (-1, -1) share (2, 2)
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Market Structure VI: An Application

Sequential Quantity Setting: The Stackelberg Game
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The Stackelberg Game

The game:
Players:
two firms (duopolists), 1 and 2 players 1 and 2 set quantities y1, y2 player 1 moves first (she is the Stackelberg leader) player 2 observes 1s choice of y1, and then sets y2. players 1, 2 produce quantities y1, y2 of the same homogeneous product, each at constant marginal cost c inverse demand: p = a - bY, where Y = y1 + y2
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Strategies:

Payoffs:
The Stackelberg Game, contd

Payoffs, contd:
firm 1s profit when it sets quantity y1 and firm 2 sets quantity y2: 1 (y1, y2) = p y1 - c y1, or: 1 (y1, y2) = (a - b(y1 + y2)) y1 - c y1, or: 1 (y1, y2) = ay1 - by12 - by2y1 - c y1, or: 1 (y1, y2) = - by12 + (a - by2 - c)y1. The combinations of y1 and y2 for which profit is constant are firm 1s isoprofit curves. (Topic 4) Similarly for firm 2: 2 (y1, y2) = - by22 + (a - by1 - c)y2.
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Solution: by backward induction:
Player 2 chooses the quantity that is best for her, after observing what player 1 has chosen, i.e. player 2 plays her best response to player 1s choice: player 2 chooses a point on her best response function. Knowing this, player 1 chooses the quantity that is best for her, given that (after she has chosen), player 2 will choose a point on her best response function, i.e. player 1 chooses the point on player 2s best response function that is best for her.
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Firm 2 chooses the quantity that is best, after having observed firm 1s choice of quantity y1.
Firm 2 chooses y2 to: max 2 (y1, y2) = - by22 + (a - by1 - c)y2. - 2by2 + a - by1 - c = 0, or y2 = (a - by1 - c)/2b.
Knowing this, firm 1 chooses the quantity that is best.

Firm 1 chooses y1 to: max 1 (y1, (a - by1 - c)/2b) = = - by12 + (a - b((a - by1 - c)/2b) - c)y1. - 2by1 + a - c - 0.5a + 0.5c + by1 = 0, or y1 = (a - c) / 2b
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So firm 1 chooses y1 = (a - c) / 2b. Therefore firm 2 chooses y2 = (a - by1 - c)/2b, or y2 = (a - b((a - c) / 2b) - c)/2b, or: y2 = (a - c) / 4b
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Nash equilibrium in the Cournot game Subgame perfect equilibrium in the Stackelberg game f2(y1) - firm 2s reaction function
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DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

Dartmouth College, Department of Economics: Economics 21, Summer02 Summer02

Topic 4: Fun and Games

Review: Choices and Outcomes

Choose the option that has an outcome that maximizes utility.

Under uncertainty, the probability distribution over possible outcomes is known.

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

Choices and Outcomes, contd

Under uncertainty, the probability distribution over possible outcomes is known.

Maximize expected profit (not covered).

Choices and Outcomes, contd

Under uncertainty, the probability distribution over possible outcomes is known.

Maximize expected profit (not covered).

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

Choices against Nature

The agent cannot influence natures move in this game.

We call these social encounters games.

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

We have already analyzed some games:

In perfect competition, there is no need to model interaction:

Dartmouth College, Department of Economics: Economics 21, Summer02 Summer02

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

Sequential move games (dynamic games):

Dartmouth College, Department of Economics: Economics 21, Summer02 Summer02

Normal Form Games

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

Normal Form Games

i.e. each players payoff depends on the strategy profile.

Analogy with parlor games: e.g. Pong.

Example: The Price War Game

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

The Price War Game, contd

Payoffs: player 1 - player 2

What do we want from an equilibrium concept?

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

Dominant Strategies, contd

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

The Price War Game, contd

Fun: Prisoners Dilemma Game

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

The Advertising Game

What is the dominant strategy equilibrium in this game?

The Advertising Game, contd

What should our equilibrium prediction be?

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

The Price War Game, contd

Check each potential equilibrium strategy profile.

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

Nash E. and Dominant Strategies

The Advertising Game, contd

The unique Nash equilibrium strategy profile is (high, high).

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

Existence of Nash Equilibrium

Is the Nash equilibrium prediction unique?

The Standards Game

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

Fun: Battle of the Sexes Game

Nash Equilibrium and Uniqueness

Are multiple equilibria a feature of the world?

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

Best Responses, contd

DARTMOUTH COLLEGE, DEPARTMENT OF ECONOMICS

Best Responses, contd

Nash and Best Responses