ECON 159: Game Theory
Lecture 05 - Nash Equilibrium: Bad Fashion and Bank Runs. We first define formally the new concept from last time: Nash equilibrium. Then we discuss why we might be interested in Nash equilibrium and how we might find Nash equilibrium in various games. As an example, we play a class investment game to illustrate that there can be many equilibria in social settings, and that societies can fail to coordinate at all or may coordinate on a bad equilibrium. We argue that coordination problems are common in the real world. Finally, we discuss why in such coordination problems - unlike in prisoners' dilemmas - simply communicating may be a remedy. (from oyc.yale.edu)
| Lecture 05 - Nash Equilibrium: Bad Fashion and Bank Runs |
| Time | Lecture Chapters |
| [00:00:00] | 1. Nash Equilibrium: Definition |
| [00:09:31] | 2. Nash Equilibrium: Examples |
| [00:23:13] | 3. Nash Equilibrium: Relation to Dominance |
| [00:31:53] | 4. Pareto Efficient Equilibria in Coordination Games: The Investment Game |
| [00:53:11] | 5. Pareto Efficient Equilibria in Coordination Games: Other Examples |
| References |
| Lecture 5 - Nash Equilibrium: Bad Fashion and Bank Runs Instructor: Professor Ben Polak. Resources: Problem Set 2 [PDF]; Blackboard Notes Lecture 5 [PDF]. Transcript [html]. Audio [mp3]. Download Video [mov]. |
Go to the Course Home or watch other lectures: