M B A 8620 Chapter 12: Clemson - Economics 8620 - Book Notes on Chapter 12 - 10.24.16 - Jose Pena

• School: Clemson University
• Department: Business Administration
• Course: M B A 8620
• Professor: Ron Gregory

Document Summary

Ch 12 game theory and business strategy. Interactions between polluters and those harmed by pollution: transactions between the buyers and sellers of homes, negotiations between parties with different amounts of information (car owners and auto mechanics, biddings in auctions, analyze electoral politics. A strategy is a battle plan that specifies the actions or moves that a player will make: some strategies consist of a combination of actions or moves, possibly contingent on what a rival does. A pa(cid:455)off fu(cid:374)(cid:272)tio(cid:374) spe(cid:272)ifies ea(cid:272)h pla(cid:455)er"s pa(cid:455)off as a fu(cid:374)(cid:272)tio(cid:374) of the strategies (cid:272)hose(cid:374) (cid:271) all players. The single period game is called static game: each player acts only once and the players act simultaneously (or at least each player a(cid:272)ts (cid:449)ithout k(cid:374)o(cid:449)i(cid:374)g ri(cid:448)als" a(cid:272)tio(cid:374)s(cid:895) like where to locate a plant. Its crucial to know how much information participants have when analyzing a game: we assume that all information is common knowledge.