Documentos de Académico
Documentos de Profesional
Documentos de Cultura
Von Neuman and Morgenstern (The Theory of Games and Economic Behavior, 1944) Conceptual Framework
Game strategy Components of a game
Strategies
Dominant strategy
Best regardless what others do
Maximin strategy
Choice that maximizes across the set of minimum possible payoffs Best of the worst
Unstable Games
No equilibrium found Strategy chosen leads to solution Each player then has incentive to switch
Repeated Games
Single period game predicts competition, but there are likely to be multiple periods. Multiple periods allow for retribution, not found in single period games
Duopoly as a Multiperiod Game More likely to collude
N-Person Games
Extend to more than 2 players Complications:
Coalitions Cooperation and duplicity
First-Mover Games
Game with military and civilian markets for Hum Vs.
A Credible Threat
A credible threat--an action perceived as a possible penalty in a noncooperative game.
Its existence sometimes induces cooperative behavior.
Size Barriers
Sometimes market entry requires large scale Incumbents may accommodate entrant, allowing a niche Incumbents may take entry deterring actions, such as cutting prices at the threat of entry
Sorting Rules
Brand loyalty Efficient rationing Random rationing Inverse intensity rationing
Simultaneous Games
A sealed bid auction is a simultaneous game A dominant strategy is the best decision, no matter what anyone else does. When no Nash equilibrium exists, it is useful to hide ones strategy by randomly changing strategies. Called a mixed Nash equilibrium strategy
Nash Equilibrium
When all players make their best reply responses (so changing their choices cannot improve their situation) then the game is in Nash Equilibrium Since game trees have several branches, we can examine the concept in each part of the tree, called a subgame.
Repeated Games
Escape from the prisoners dilemma If games are repeated, there is a greater expectation that firms will achieve a cooperative solution Firms signal by their behavior whether they want to cooperate or not Firms that expand output show that they do not want to cooperate