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slide26-oct31 - ECON 401 Game theory Nash Equilibrium...

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ECON 401: Game theory: Nash Equilibrium Siyang Xiong Rice University October 30, 2011 Xiong (Rice University) ECON 401 October 30, 2011 1 / 12
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On Nash Equilibrium Nash Equilibria as focal points. . Cambridge, Mass: Harvard University Press. Thomas Schelling 2005 Nobel Prize laureate in Economics. Xiong (Rice University) ECON 401 October 30, 2011 2 / 12
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On Nash Equilibrium empire state building grand central station empire state building 10 , 10 0 , 0 grand central station 0 , 0 10 , 10 for new yorkers, (grand central station, grand central station) is the focal point; for tourists, (empire state building, empire state building) is the focal point. empire state building grand central station empire state building 10 , 10 0 , 0 grand central station 0 , 0 1 , 1 (empire state building, empire state building) is the focal point, because it dominates (grand central station, grand central station) in payo/s. Xiong (Rice University) ECON 401 October 30, 2011 3 ± 12
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Find all Pure-Strategy Nash Equilibrium D E F A 2,0 0,2 0,1 B 2,4 2,4 2,0 C 1,0 1,1 2,1 consider three cases: 1) A is played in pure-strategy NE; 2) B is played in NE; 3) C is played in NE. 1
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slide26-oct31 - ECON 401 Game theory Nash Equilibrium...

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