ECON 159 - Lecture 4 - Best Responses in Soccer and Business Partnerships

Lecture 4 - Best Responses in Soccer and Business Partnerships

Overview

We continue the idea (from last time) of playing a best response to what we believe others will do. More particularly, we develop the idea that you should not play a strategy that is not a best response for any belief about others' choices. We use this idea to analyze taking a penalty kick in soccer. Then we use it to analyze a profit-sharing partnership. Toward the end, we introduce a new notion: Nash Equilibrium.

Resources

Assignment

Strategies and Games: Theory And Practice. (Dutta): Chapter 5

Strategy: An Introduction to Game Theory. (Watson): Chapters 6-9

Thinking Strategically. (Dixit and Nalebuff): Chapter 3, Sections 4-6

Course Media

Transcript

html

Audio

mp3

Low Bandwidth Video

mov [100MB]

High Bandwidth Video

mov [500MB]