20005 lecture11 Review
ECON 20005 / 316–210
Competition and Strategy
Course Review and Going Forward
David Byrne
Department of Economics
University of Melbourne
1/9
Hopefully now have a better sense of...
I
How economists view the world
I
That game theory plays a role in your day-to-day life
I
Why incentives matter
I
The importance of information
I
Why governments are really worried about situations where a few firms dominate an industry (Coles and Woolworths)
I
What it means when people say going to University acts as a
“signalling device”
I
How to think about Collective (in)Action with climate change policies worldwide
2/9
Course Overview
I
Thanks for your hard work; I’ve pushed you hard
I
Recall my thoughts on getting stuck: it helps you learn
I
By working through tough assignments, I’m hoping to have you “battle ready” for the final
I
We’ve done a lot!
3/9
Course Overview
I
Game theory basics: payo↵s, strategies, dominant strategies,
SPNE, Pure-NE, Normal/Extensive Form, Nature
I
Classic game tables: Prisoner’s Dilemma, Battle of the
Sexes (Coordination), Chicken, Assurance
I
Continuous games: best response functions, plotting best response functions, finding NE, mixed strategy NE
I
Repeated Prisoner’s Dilemma: finite/infinite/unknown repetitions, Collusion, Grim Strategies, Tit-for-Tate
I
Industrial Organisation 1: Monopoly, Cournot, Stackelberg,
Homogeneous/Di↵erentiated Bertrand
I
Industrial Organisation 2: Product di↵erentiation, Ice-cream salesman, Linear City pricing game, R&D races, Rent Seeking
4/9
Course Overview
I
Asymmetric Information: Cheap Talk, Adverse Selection
(Lemons/Peaches Problem, Signalling and Screening in the labour market, separating and pooling equilibrium), Moral
Hazard (Principal Agent Model, IC/PC constraints)
I
Collective Action Games: Prisoner’s Dilemma, Chicken and
Assurance Games (both Game Tables and n-player models), multiple equilibria, socially optimal outcome vs. NE outcome,
Tragedy of the Commons
Competition and Strategy
Course Review and Going Forward
David Byrne
Department of Economics
University of Melbourne
1/9
Hopefully now have a better sense of...
I
How economists view the world
I
That game theory plays a role in your day-to-day life
I
Why incentives matter
I
The importance of information
I
Why governments are really worried about situations where a few firms dominate an industry (Coles and Woolworths)
I
What it means when people say going to University acts as a
“signalling device”
I
How to think about Collective (in)Action with climate change policies worldwide
2/9
Course Overview
I
Thanks for your hard work; I’ve pushed you hard
I
Recall my thoughts on getting stuck: it helps you learn
I
By working through tough assignments, I’m hoping to have you “battle ready” for the final
I
We’ve done a lot!
3/9
Course Overview
I
Game theory basics: payo↵s, strategies, dominant strategies,
SPNE, Pure-NE, Normal/Extensive Form, Nature
I
Classic game tables: Prisoner’s Dilemma, Battle of the
Sexes (Coordination), Chicken, Assurance
I
Continuous games: best response functions, plotting best response functions, finding NE, mixed strategy NE
I
Repeated Prisoner’s Dilemma: finite/infinite/unknown repetitions, Collusion, Grim Strategies, Tit-for-Tate
I
Industrial Organisation 1: Monopoly, Cournot, Stackelberg,
Homogeneous/Di↵erentiated Bertrand
I
Industrial Organisation 2: Product di↵erentiation, Ice-cream salesman, Linear City pricing game, R&D races, Rent Seeking
4/9
Course Overview
I
Asymmetric Information: Cheap Talk, Adverse Selection
(Lemons/Peaches Problem, Signalling and Screening in the labour market, separating and pooling equilibrium), Moral
Hazard (Principal Agent Model, IC/PC constraints)
I
Collective Action Games: Prisoner’s Dilemma, Chicken and
Assurance Games (both Game Tables and n-player models), multiple equilibria, socially optimal outcome vs. NE outcome,
Tragedy of the Commons