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lecture23full - Mixed strategies Cornout with Incomplete...

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Recap Finitely repeated games with multiple equilibria to the stage game Can use the ‘bad’ equilibrium as a threat to ensure cooperation in the first period Infinitely repeated games Even when there is only one equilibrium to the stage game, can have lots of SPNE to the infinitely repeated game Showed for what values of the discount factor ( δ ) can particular trigger strategies be supported Static games of incomplete information Nature determines type but individuals only know their own type. Need a plan of action for every type you could be
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Bayesian Nash Equilibria
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Unformatted text preview: Mixed strategies Cornout with Incomplete Information Cornout with Incomplete Information 2 When SPNE breaks down Strengthening SPNE 1 At each information set, the player with the move must have a belief about which node in the information set has been reached (‘Belief’ refers to the probability they’re at a particular node) 2 Given beliefs, players strategies must be sequentially rational: the subsequent strategy must be optimal given their beliefs Beliefs Example Another example Signaling games Pooling and Separating Equilibria...
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This note was uploaded on 05/13/2010 for the course ECON 105D taught by Professor Cur during the Fall '09 term at Duke.

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lecture23full - Mixed strategies Cornout with Incomplete...

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