Material Detail

Lecture 14 -  Backward induction: commitment, spies, and first-mover advantages

Lecture 14 - Backward induction: commitment, spies, and first-mover advantages

This video was recorded at ECON 159 - Game Theory. We first apply our big idea--backward induction--to analyze quantity competition between firms when play is sequential, the Stackelberg model. We do this twice: first using intuition and then using calculus. We learn that this game has a first-mover advantage, and that it comes commitment and from information in the game rather than the timing per se. We notice that in some games having more information can hurt you if other players know you will have that information and hence alter their behavior. Finally, we show that, contrary to myth, many games do not have first-mover advantages. Reading assignment: Strategies and Games: Theory And Practice. (Dutta): Chapter 11 Strategy: An Introduction to Game Theory. (Watson): Chapter 2 Resources: Problem Set 6 [PDF] Blackboard Notes Lecture 14[PDF]

Quality

  • User Rating
  • Comments
  • Learning Exercises
  • Bookmark Collections
  • Course ePortfolios
  • Accessibility Info

More about this material

Comments

Log in to participate in the discussions or sign up if you are not already a MERLOT member.