Political Science C135
Professor Robert Powell
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The final is Tuesday, December 14
at 3-6 p.m. in
Wheeler Auditorium. I have office hours next
Wednesday from 2-3:30 pm and no regular office
hours. This is our last formal meeting here. I’ll
quickly cover ideas we’ve talked about since the
midterm then open it up for questions.
I’ve posted finals from the last few years online,
you should expect exactly the same format and
instructions, although maybe not exactly the same
number of questions. This is open book and open
note. As with the midterm, I’ll try to have enough
space for people to write their answers on the exam,
but you can bring a blue book for extra room. I’d
bring a calculator as an insurance policy if I were
you, but you could probably do it without.
: Is it cumulative?
Yes, you are responsible for all the material, but the
stuff we talked about at the end built on stuff we
talked about early on. So if I’m trying to assess if
you know NE, I can ask you about SPE. Most
questions will focus on the latter part of the course.
One tool we haven’t used much after the midterm is
mixed strategies, but that’s a very important part, so
make sure you’re on top of that.
These are topics I’ll remind you of: complete
information bargaining, repeated games,
asymmetric information games, signaling games.
Complete information bargaining
is fraught with
both conflict and cooperation. If we can reach an
agreement, there’s more stuff to be divided because
we can produce more or burn up less. Of those
games, however, we each want the entire pot. So
bargaining is over how to divide the pot. With
complete information, we saw that typically
bargaining never breaks down and settles without
any haggling. Basically, the first offer is accepted,
because the offerer knows exactly what he needs to
offer to buy a yes. It’s worth it to the offerer to buy
a yes rather than to have no agreement. There’s no
risk-return tradeoff with complete information. Two
extremes in that setting are take it or leave it games
(or ultimatum games) and extended bargaining
games. The former is where there’s an offer on the
table you have to accept or reject. That situation is
the most asymmetric when it comes to bargaining
power. The optimal offer is 0 for you and 100 for
me, and you’re indifferent and so you’ll say yes. All
the bargaining surplus goes to the offerer. The other
extreme is bargaining that could go on for a long
time. We saw that as long as the players are