Marciano Siniscalchi October 28, 1999 Introduction [Again, by and large, I will follow OR, Chap. 8, so will keep these notes to a minimum.] Review of key definitions Recall our three payoff aggregation criteria: discounting, i.e

The theory of extensive games is built upon a key notion, that of sequential rationality, and a key insight, the centrality of off-equilibrium beliefs. The definition of sequential equilibrium brings both to the fore in a straightforward manner, and emphasizes their interrelation. From subgame perfection to sequential rationality

This lecture presents the two main contributions of \interactive epistemology\ to the the- ory of normal-form games: a characterization of Nash equilibrium beliefs, and a full (i.e. behavioral)characterization of rationalizability. A review of the basic definitions For your convenience, summarize the essential definitions pertaining to models of interactive

Beginning with this lecture, we focus our attention on dynamic games. The majority of games of economic interest feature some dynamic component, and most often payoff uncertainty as well. The analysis of extensive games is challenging in several ways. At the most basic level describing the possible sequences of events (choices)which define a particular game form is not problematic per se; yet, different formal definitions have been proposed, each with its pros and cons

This lecture focuses on the interpretation of solution concepts for normal-form games. You will recall that, when we introduced Nash equilibrium and Rationalizability, we mentioned numerous reasons why these solution concepts could be regarded as yielding plausible restric-

Class: Tue-Thu 10: 40-12: 10 [?] Room 317, Bendheim. OH, by appointment. The Big Picture Most of you will already have used some of the tools of GT in your core courses. You will probably be familiar with the notions of simultaneous us. extensive-form game, perfect vs. imperfect information, complete us. incomplete information, Nash

By and large, I will follow OR, Chapters 1l and 12, so I will keep these notes to a minimum. J Games with observed actions and payoff uncertainty Not all dynamic models of strategic interaction fit within the category of games with observed actions we have developed in the previous lectures. In particular, no allowance was made

The notion of subgame perfection is the cornerstone of the theory of extensive games. It embodies its key intuitions-and provides a vivid example of the difficulties inherent in such a theor But, above all, it has proved to be extremely profitable in a variety of applications. More- over, it has spawned a huge theoretical literature which has attempted(often successfully

These notes essentially tie up a few loose ends in Lecture 8; in particular, I exhibit examples of inefficiencies in first- and second-price auctions. I would also like to briefly comment on Questions 1 and 2 in Problem Set 2

Introduction The purpose of this lecture is to help you familiarize with the workings of sequential equi- librium and\sequential equilibrium lite\, i.e. perfect Bayesian equilibrium The main focus is the \reputation\result of Kreps and Wilson(1982). You should refer to OR for details and definitions: I am following the textbook quite closely We have already mentioned the Entry Deterrence game. Now consider a K-fold repetition