Class_13

# Class_13 - GameTheory Lecture 13 Outline Today A Bayesian game The gift game Moral hazard in The Principle-Agent problem Tomorrow Introduction to

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Econ 171 – Introduction to  Game Theory Lecture 13

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Outline Today: A Bayesian game – The gift game Moral hazard in The Principle-Agent problem Tomorrow: Introduction to auctions Solving first and second-price auctions Thursday: Introduction to mechanism design, information aggregation
Bayesian games – The gift game Payoff uncertainty in games with private information, each due to an act of nature that is not observable to at least one player . 1,-1 -1,0 -1,0 0,0 0,0 1,1 2 Enemy (1-p) A A R R Friend (p) 1 1 Gf Nf Ge Ne

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Bayesian games – The gift game Strategies for P1: {GfGe,GfNe,NfGe,NfNe} Strategies for P2: {A,R} 1,-1 -1,0 -1,0 0,0 0,0 1,1 2 Enemy (1-p) A A R R Friend (p) 1 1 Gf Nf Ge Ne
Bayesian games – The gift game Bayesian normal form Payoffs are expected payoffs Ex. profiles (NfGe,R) and (GfGe,A) P1: (p)0+(1-p)(-1)=p-1 P2: (p)0+(1-p)(0)=0

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Bayesian games – The gift game What is expected payoff for P1 for strategy profile (GfNe,R)? a) p b) 1-p c) p-1 d) -p e) ? 1,-1 -1,0 -1,0 0,0 0,0 1,1 2 Enemy (1-p) A A R R Friend (p) 1 1 Gf Nf Ge Ne
Bayesian games – The gift game What is expected payoff for P1 for strategy profile (GfGe,R)? a) -1 b) 0 c) p-1 d) p e) ? 1,-1 -1,0 -1,0 0,0 0,0 1,1 2 Enemy (1-p) A A R R Friend (p) 1 1 Gf Nf Ge Ne

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Bayesian games – The gift game What is expected payoff for P2 for strategy profile (GfGe,A) if Nature is equally likely to produce friend and enemy? a) ½ b) 1 c) 0 d) -½ e) ? 1,-1 -1,0 -1,0 0,0 0,0 1,1 2 Enemy (1-p) A A R R Friend (p) 1 1 Gf Nf Ge Ne
Bayesian games – The gift game If Nature produces friends with probability ¾ and enemies with probability ¼, the expected payoffs are…

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We can look for PSNE now or use IEDS first. Two PSNE (GfGe,A) and (NfNe,R)
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## This note was uploaded on 11/03/2011 for the course ASAM 2 taught by Professor Staff during the Spring '10 term at UCSB.

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Class_13 - GameTheory Lecture 13 Outline Today A Bayesian game The gift game Moral hazard in The Principle-Agent problem Tomorrow Introduction to

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