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Lecture 5 - Nash Equilibrium: Bad Fashion and Bank Runs

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Manage episode 207558831 series 2327627
Content provided by William Sheppard. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by William Sheppard or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://ppacc.player.fm/legal.
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.
  continue reading

24 episodes

Artwork
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Manage episode 207558831 series 2327627
Content provided by William Sheppard. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by William Sheppard or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://ppacc.player.fm/legal.
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.
  continue reading

24 episodes

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