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Lecture 4 - Best Responses in Soccer and Business Partnerships

1:12:04 Free

We continue the idea (from last time) of playing a best response to what we believe others will do. More particularly, we develop the idea that you should not play a strategy that is not a best response for any belief about others' choices. We use this idea to analyze taking a penalty kick in soccer. Then we use it to analyze a profit-sharing partnership. Toward the end, we introduce a new notion: Nash Equilibrium.

📑 Lecture Chapters:

Best Response: Penalty Kicks in Soccer [00:00:00]
Best Response: Issues with the Penalty Kick Model [00:15:14]
Best Response: Formal Definition [00:24:06]
Externalities and Inefficient Outcomes: The Partnership Game [00:29:59]
Nash Equilibrium: Preview [01:07:23]

Source: Ben Polak, Game Theory (Yale University: Open Yale Courses). Licensed under CC BY-NC-SA 3.0.

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ECON 159: Game Theory

This course is an introduction to game theory and strategic thinking. Ideas such as dominance, backward induction, Nash equilibrium, evolutionary stability, commitment, credibility, asymmetric information, adverse selection, and signaling are discussed and applied to games played in class and to examples drawn from economics, politics, the movies, and elsewhere.