lecture2-1

lecture2-1 - Game Theory Mike Shor Lecture 2 "I don't skate...

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Game Theory “I don’t skate to where the puck is, I skate to where it’s going to be.” - Wayne Gretzky Mike Shor Lecture    2
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Defining the Game Review Game theory is a description of strategic interaction between mutually aware players You are self-interested and selfish So is everyone else Outline: Defining the rules of the game Manipulating the rules if they are flexible Questioning game theory’s assumptions Mike Shor 2
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Rules of the Game The strategic environment Players Strategies Payoffs The rules Timing of moves Nature of conflict and interaction Informational conditions Enforceability of agreements or contracts The assumptions Rationality Common knowledge Mike Shor 3
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The Strategic Environment Players Everyone who has an effect on your earnings Strategies Actions available to each player Define a plan of action for every contingency Payoffs Numbers associated with each outcome Reflect the interests of the players Mike Shor 4
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Timing of moves Are moves simultaneous or sequential? Nature of conflict and interaction Are players’ interests in conflict? Will players interact once or repeatedly? Informational conditions Are some players better informed? Enforceability of agreements Can contracts be enforced? Mike Shor
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This note was uploaded on 03/04/2012 for the course MGT 425 taught by Professor Shor during the Spring '11 term at Vanderbilt.

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lecture2-1 - Game Theory Mike Shor Lecture 2 "I don't skate...

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