2. Simultaneous-Move Games

Assigned Reading

Thinking Strategically (Avinash Dixit and Barry Nalebuff), Chapter 3, Seeing Through Your Rival's Strategy.
Rasmusen, Eric, "U.S. Air for Sale," Dept. of Business Economics and Public Policy, Indiana University, October 30, 2001.

Central Idea: Think about what happens if your rival is as smart as you are.

Antithesis: Base your predictions on past experience, without speculation.

Topics That Might be Discussed in Class

Dominant and Dominated Strategies
- Time and Newsweek in Tables
- The Prisoner's Dilemma
Nash Equilibrium
- Coordination Games
- Battle of the Sexes
- Time and Newsweek with Continuous Strategies
US Air for Sale

Important Terms: Simultaneous vs. Sequential Moves, Dominant Strategies, Dominated Strategies, Multiple Equilibria, Nonexistence of equilibrium, Reaction Curve, Nash Equilibrium, Continuous vs. Discrete Strategies.

For Next Time

Rasmusen, Eric, ``The Kleit Oligopoly Game,'' Dept. of Business Economics and Public Policy, Indiana University, November 3, 1998.

Additional Material

Self-Test on dominant strategies, dominated strategies, and Nash equilibrium.
The US Air case notes in latex-ascii and pdf.
Newspaper excerpts for the US Air Case.
A powerpoint file with the Nash equilibrium definition, Ranked Coordination, and the Battle of the Sexes.
Scanned in GIF images of the overheads I used in class.

Return to the Thinking Strategically Home Page, at http: //pacioli.bus.indiana.edu/erasmuse/g570/g570.htm. Send comments to Prof. Rasmusen. Last updated: February 22, 2002.