Industrial Economics

Front

What is a game? And its elements?

Back

A Game is a mathematical object that formalises strategic interactions between players:

• - list of players

• - list of strategies

• - list of each players' payoff

Front

What is Nash Equilibrium 1?

Back

Every player has no unilateral ex-post regret.

Front

What is Nash Equilibrium 2?

Back

The strategy of each player is qualified as the best reply to the rivals' strategies.

Front

What is a Dominant Strategy?

Back

It is the best reply of a player invariant in the rivals' strategies.

Front

What is Subgame Perfect Equilibrium (SPE)?

Back

An outcome that induces a Nash Equilibrium by backward induction in every proper subgame of G, more demanding than the NE.

Front

What are the characteristics of SPE?

Back

The SPE is sensitive to the sequential play and there exists a first-mover advantage.

Front

What happens if information is imperfect in game theory?

Back

Nash Equilibrium (NE) and Subgame Perfect Equilibrium (SPE) are the same.

Front

What is the theorem related to Pareto-efficiency in game theory?

Back

In a game involving multiple NE that can be pareto-ranked, the adoption of sequential play leads to the selection of the Pareto-efficient equilibrium as the Subgame Perfect Equilibrium.

Front

What is the theorem related to Stackelberg-solvable games?

Back

It holds only for discrete games: Under perfect information, choices driven by individual rationality may go hand in hand with social efficiency.

Front

What can the centipede game teach us?

Back

It is useful to understand that backward induction, as other instruments, has its limits.