Lecture12_GameTheory2_Econ121_Fall2010

Lecture12_GameTheory2_Econ121_Fall2010 - Lecture 12 Game...

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Click to edit Master subtitle style  4/28/11 Lecture 12 Game Theory 2 Econ 121: Industrial Organization UC Berkeley Fall 2010 Prof. Cristian Santesteban
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 4/28/11 Overview Sequential Games (Continued) Stackelberg Revisited Mixed Strategy Equilibria
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 4/28/11 Sequential Game 1
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 4/28/11 Sequential Game 1 Two Strategies for Player A: {L, R} Four Strategies for Player B: 1. l no matter what player A does 2. r no matter what player A does 3. l if L and r if R 4. r if L and l if R Possible Nash Equilibria: –. (L, 1), (L, 2), (L, 3), (L, 4), (R, 1), (R, 2), (R, 3), (R, 4)
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 4/28/11 Sequential Game 1 Nash Equilibria: (L, 1), (R, 2), (R, 3) SGP Equilibria: (R, 3) Why isn’t (L, 1) a SGPE? Because l is not Player B’s best response off the equilibrium path. That is, l is not the best response if Player A were to play R. Or, another way of saying this is that (R,
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 4/28/11 Market Entry Game
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 4/28/11 Market Entry Game Two Strategies for Entrant: {out, in}
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