Lecture notes
ECON0027 Week 3
- Module
- Economics (ECON0027)
- Institution
- University College London (UCL)
In depth notes on ECON0027 Week 3
[Show more]
Seller
Follow
Content preview
Week 3Games in extensive form with perfect information
Reading: Ch 5, 6, 7
Introduction
De nitions
Game in extensive form: CN.A.X.E.u.luilien
Set of playersN 11,2 nl
Set of actions A
Set of nodes including the initial node
Any nodeocean.az
amresults from this sequence of actions
The set of actions available at x ACAEA
Set of terminal notes EwhereAla0
for ee
The player choosing action at node x is cXIE N
i’s payo function
A game is perfect recall if each player remembers what they did in prior moves, and each player
remembers everything that they knew before
T is nite if A and X are nite
Assumptions
• Common knowledge of rationality
• Common knowledge of game
• Perfect recall
Strategies
Pure strategy:si X A satisfyings ibdeAG
Mixed strategy:
Behavioural strategy: Oi X s a satisfyingsupploiculcAG
Behavioural strategy pro le: osi.osil.n.losn.si
Randomisation between actions ⫫ at each node
SPNE: a PS pro le, s*, is an SPNE of a game of perfect information if and only if it is a backward
induction strategy pro le of this game
Game tree
Example a'b
N 1,2
d BD16,41 Coal
3,11 2 o.L.R.CR.al.CR.bs.CR.b.d.CR.b.pl Be16,41s3
X
16,4
is 3
I D
cog
PS ke.LD.rc.ro
o Cocoaonions
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller zctpfru. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £7.16. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
83225 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now