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The ideas underlying game theory have appeared throughout history, apparent within the bible, the Talmud, the works of Descartes and Sun Tzu, and also the writings of Chales Darwin
Consider two quantity-setting firms that produce a homogeneous good. The inverse demand function for the good is p = A - (q 1 +q 2 ). Both firms have a cost function C = q 2 (a
A multiunit auction mechanism for assigning heterogeneous (different) objects. The highest bidder in the first round selects one item among those offered for sale. Then, a second r
(a) Equilibrium payoffs are (1, 0). Player A’s equilibrium strategy is S; B’s equilibrium strategy is “t if N.” For (a): Player A has two strategies: (1) N or (2) S. P
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Find the pure-strategy Nash equilibrium Alice is on vacation in Wonderland and considers trying a special mushroom sold by the caterpillar. She cannot tell upfront if the mush
Named when Vilfredo Pareto, Pareto potency (or Pareto optimality) may be alive of potency. An outcome of a game is Pareto economical if there's no different outcome that produces e
Computer Game Zenda This game was invented by James Andreoni and Hal Varian; see their article, "Pre-Play Contracting in the Prisoners 'Dilemma".The paper also contains some co
Strategies against Hostage Takers T ypical Situations Terrorists: usually have several hostages, demands are polit- ical, may be fanatics, location may be public or sec
Consider two identical firms, for each firm, the total cost of producing q units of output is C(q)=0.5q^2. The price is determined as P(q1,q2)- a-q1-q2. Estimate Cournots outcome;
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