Partial Derivatives And Nash Equilibrium

1 Static Games of Complete Information 1

1.1 Basic Theory: Normal-Form Games and Nash

Equilibrium 2

1.1. A Normal-Form Representation of Games . ... 2

1.1.B Iterated Elimination of Strictly Dominated Strategies 4

1.1 .C Motivation and Definition of Nash Equilibrium 8

1.2 Applications 14

1.2. A Cournot Model of Duopoly 14

1.2.B Bertrand Model of Duopoly 21

1.2.C Final-Offer Arbitration 22

1.2.D The Problem of the Commons 27

1.3 Advanced Theory: Mixed Strategies and

Existence of Equilibrium 29

1.3.A Mixed Strategies 29

1.3.B Existence of Nash Equilibrium 33

1.4 Further Reading 48

1.5 Problems 48

1.6 References 51

2 Dynamic Games of Complete Information 55

2.1 Dynamic Games of Complete and Perfect

Information 57

2.1.A Theory: Backwards Induction 57

2.1.B Stackelberg Model of Duopoly 61

2.1.C Wages and Employment in a Unionized Firm 64

2.1.D Sequential Bargaining 68

2.2 Two-Stage Games of Complete but Imperfect Information 71

2.2.A Theory: Subgame Perfection 71

2.23 Bank Runs 73

2.2.C Tariffs and Imperfect International

Competition 75

2.2.D Tournaments 79

2.3 Repeated Games 82

2.3.A Theory: Two-Stage Repeated Games 82

2.3.B Theory: Infinitely Repeated Games 88

2.3.C Collusion between Cournot Duopolists 102 2.3.D Efficiency Wages 107

2.3.E Time-Consistent Monetary Policy 112

2.4 Dynamic Games of Complete but

Imperfect Information 115

2.4.A Extensive-Form Representation of Games . . 115 2.4.B Subgame-Perfect Nash Equilibrium 122

2.5 Further Reading 129

2.6 Problems 130

2.7 References 138

3 Static Games of Incomplete Information 143

3.1 Theory: Static Bayesian Games and Bayesian Nash

Equilibrium 144

3.1.A An Example: Cournot Competition under

Asymmetric Information 144

3.1.B Normal-Form Representation of Static

Bayesian Games 146

3.1.C Definition of Bayesian Nash Equilibrium . . .149

3.2 Applications 152

3.2.A Mixed Strategies Revisited 152

3.2.B An Auction 155

3.2.C A Double Auction 158

3.3 The Revelation Principle 164

3.4 Further Reading 168

3.5 Problems 169

3.6 References 172

4 Dynamic Games of Incomplete Information 173

4.1 Introduction to Perfect Bayesian Equilibrium 175

4.2 Signaling Games 183

4.2.A Perfect Bayesian Equilibrium in Signaling

Games 183

4.2.B Job-Market Signaling 190

4.2.C Corporate Investment and Capital Structure . 205

4.2.D Monetary Policy 208

4.3 Other Applications of Perfect Bayesian

Equilibrium 210

4.3.A Cheap-Talk Games 210

4.3.B Sequential Bargaining under Asymmetric

Information 218

4.3.C Reputation in the Finitely Repeated

Prisoners' Dilemma 224

4.4 Refinements of Perfect Bayesian Equilibrium 233

4.5 Further Reading 244

4.6 Problems 245

4.7 References 253

Index

Fast Freelancing Funds

Fast Freelancing Funds

Learning About Fast Freelancing Funds Can Have Amazing Benefits For Your Life And Success! Get Instant Work And Fast Cash With Your Skills! Everybody could use some surplus money, especially in hard times.

Get My Free Ebook


Post a comment