CAS EC 101 Lecture Notes - Lecture 23: Matching Pennies, Nash Equilibrium, Mastercard
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CAS EC 101 Full Course Notes
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Using game theory to analyze offense vs. defense. In many competitive situations the offense of one competitor battles the defense of the other. True of many sports like soccer, basketball, and football. If the defense matches the offense then the defense wins. Attack from the left or the right. If the enemy correctly anticipates your choice you lose the battle. Mastercard is better off if it knows visa"s business strategy. Visa would be better off if mastercard guessed wrong. In this example, eva plays offense, esther plays defense. If esther matches eva (both heads or both tails) then eva. Matching pennies is a gem theory model of offense vs defense. Eva and esther each puts a penny on the table at the same time pays esther 1 dollar. But if esther fails to match eva (one head one tail) esther pays eva 1 dollar.
