COMM 295 Lecture Notes - Lecture 13: Rationality
Document Summary
Whether the nash equilibrium maximizes the combined payoffs for the players depends on the properties of the gams such as the payoffs. In a game where there is no dominant strategy for players, it is possible to predict the outcome of the game (nash equilibrium) by eliminating the dominated strategies. Mixed strategy: choice is made according to probability it assigns to different strategies. (always have nash equ. ) Coordination games: games with multiple nash equilibria where players can credibly coordinate to select one of these equilibria. Under fairly general conditions, if the auction rules result in a win by the person placing the highest value on a good that various bidders value differently, the expected price is the same in all auctions. In a repeated game, a firm can influence its rival"s behavior by threatening punishment, possibly leading to a different outcome than in a corresponding static game.
