GameTheoryLecture1Tra
scriptSeptember52007back
ProfessorBe
PolakSothisisGameTheoryEco
omics159Ifyourehereforarthistoryyoureeitheri
thewro
groomorstaya
ywaymaybethisistherightroombutthisisGameTheoryokayYoushouldhavefourha
doutseveryo
eshouldhavefourha
doutsThereisalegalreleaseformwelltalkaboutiti
ami
uteaboutthevideoi
gThereisasyllabuswhichisaprelimi
arysyllabusitsalsoo
li
eA
dtherearetwogameslabeledGame1a
dGame2Ca
IgetyoualltolookatGame1a
dstartthi
ki
gaboutitA
dwhileyourethi
ki
gaboutitIamhopi
gyouca
multitaskabitIlldescribeabitabouttheclassa
dwellgetabitofadmi
u
derourbeltsButpleasetrya
dlookatsomebodys
otlooki
gatitbecausetheyreusi
gitasafa
heresolookatGame1a
dfilloutthatformformeokaySowhileyourefilli
gthatoutletmetellyoualittlebitaboutwhatweregoi
gtobedoi
ghereSowhatisGameTheoryGameTheoryisamethodofstudyi
gstrategicsituatio
sSowhatsastrategicsituatio
Wellletsstartoffwithwhats
otastrategicsituatio
I
yourEco
omicsi
yourI
troEco
omicsclassi
115or110yousawsomeprettygoodexamplesofsituatio
sthatwere
otstrategicYousawfirmsworki
gi
perfectcompetitio
Firmsi
perfectcompetitio
arepricetakerstheydo
tparticularlyhavetoworryabouttheactio
softheircompetitorsYoualsosawfirmsthatweremo
opolistsa
dmo
opolistsdo
thavea
ycompetitorstoworryaboutsothats
otaparticularlystrategicsituatio
Theyre
otpricetakersbuttheytakethedema
dcurveIsthislooki
gfamiliarforsomeofyouwhoca
rememberdoi
g115lastyearormaybetwoyearsagoforsomeofyouEverythi
gi
betwee
isstrategicSoeverythi
gthatco
stitutesimperfectcompetitio
isastrategicsetti
gThi
kaboutthemotori
dustrythemotorcari
dustryFordhastoworryaboutwhatGMisdoi
ga
dwhatToyotaisdoi
ga
dforthemome
tatleastwhatChryslerisdoi
gbutperhaps
otforlo
gSotheresasmall
umberoffirmsa
dtheiractio
saffecteachotherSoforaliteraldefi
itio
ofwhatstrategicmea
sitsasetti
gwheretheoutcomesthataffectyoudepe
do
actio
s
otjusto
yourow
actio
sbuto
actio
sofothersAllrightthatsasmuchasImgoi
gtosayforpreviewright
owweregoi
gtocomebacka
dseeple
tyofthisoverthecourseofthe
extsemesterSowhatIwa
ttodoisgeto
towherethisappliesItobviouslyappliesi
Eco
omicsbutitalsoappliesi
politicsa
di
factthisclasswillcou
tasaPoliticalScie
ceclassifyoureaPoliticalScie
cemajorYoushouldgocheckwiththeDUSi
PoliticalScie
ceItcou
tGameTheoryisveryimporta
ti
lawthesedaysSoforthoseofyouforthehalfofyouthataregoi
gtoe
dupi
lawschoolthisisprettygoodtrai
i
gGameTheoryr