Lecture 5 - Nash equilibrium: bad fashion and bank runs

author: Benjamin Polak, Department of Economics, Yale University
recorded by: Yale University
published: Nov. 15, 2010,   recorded: September 2007,   views: 4398
released under terms of: Creative Commons Attribution No Derivatives (CC-BY-ND)
Categories

See Also:

Download Video - generic video source Download yaleecon159f07_polak_lec05_01.mov (Video - generic video source 576.9 MB)

Download Video Download yaleecon159f07_polak_lec05_01.flv (Video 250.0 MB)


Help icon Streaming Video Help

Related Open Educational Resources

Related content

Report a problem or upload files

If you have found a problem with this lecture or would like to send us extra material, articles, exercises, etc., please use our ticket system to describe your request and upload the data.
Enter your e-mail into the 'Cc' field, and we will keep you updated with your request's status.
Lecture popularity: You need to login to cast your vote.
  Bibliography

Description

We first define formally the new concept from last time: Nash equilibrium. Then we discuss why we might be interested in Nash equilibrium and how we might find Nash equilibrium in various games. As an example, we play a class investment game to illustrate that there can be many equilibria in social settings, and that societies can fail to coordinate at all or may coordinate on a bad equilibrium. We argue that coordination problems are common in the real world. Finally, we discuss why in such coordination problems--unlike in prisoners' dilemmas--simply communicating may be a remedy.

Reading 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

Resources:

Problem Set 2 [PDF]
Blackboard Notes Lecture 5[PDF]

Link this page

Would you like to put a link to this lecture on your homepage?
Go ahead! Copy the HTML snippet !

Write your own review or comment:

make sure you have javascript enabled or clear this field: