Slides FV L5 - EWMBA 201A Economic Analysis for Click...

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Click to edit Master subtitle style 9/16/09 EWMBA 201A Economic Analysis for Lecture 5: Game Theory September 8, 2009 Felix Várdy
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9/16/09 Definition Game Theory is: Multi-person decision theory Mathematical analysis of strategic situations Deals with: Strategies, reputation , credibility, threats, commitment, … Used in:
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9/16/09 History Gambling 18th century aristocrats. Zermelo, 1913, on chess. John Von Neumann & Oskar Morgenstern, Theory of Games and Economic Behavior, 1944. Golden age: 50s: RAND Corporation Prisoners’ dilemma John Nash: Nash equilibrium and bargaining
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9/16/09 Prisoners’ Dilemma
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9/16/09 Prisoners’ Dilemma If Clyde Does Not Confess If Clyde Confesses Bonnie 4 Years in Prison 8 Years in Prison 1 Year in Prison 3 Years in Prison Bonnie Not Confess Confess Confess Not Confess Best Strategy Best Strategy 20 years Life 0 years 1 year
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9/16/09 Prisoners’ Dilemma
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9/16/09 Prisoners’ Dilemma In PD, players have
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This note was uploaded on 09/15/2009 for the course EWMBA 201A taught by Professor Wolfram during the Fall '07 term at University of California, Berkeley.

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Slides FV L5 - EWMBA 201A Economic Analysis for Click...

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