Game Theory: Prisoners Dilemma and Nash Equilibrium

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Game Theory: Prisoners Dilemma and Nash Equilibrium

This lecture reviewed a lot but the important new thing covered is game theory.

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Lecture Note
University of Oklahoma
Econ 1123 - Princ. of Econ-Micro

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ECON 1123 1st Edition Lecture 23 Outline From Previous Lecture (Lecture 22) I. Monopolistic Competition A) Short Run Economic Profits B) Long Run Zero Economic Profits C) Monopolistic Versus Pure Competition II. Oligopoly A) Definition B) Cartel C) Price Leadership/Dominant Firm/Competitive Fringe Outline Lecture 23 I. Game Theory A) Prisoner’s Dilemma B) Nash Equilibrium II. Summary of Market Structures A) Pure Competition B) Monopolistic Competition C) Oligopoly D) Pure Monopoly Lecture 23 Notes III. Game Theory In oligopoly, firms are mutually interdependent. Mutual interdependence- the behavior of one firm depends on the reactions of the firms –Game theory models this Game variables: 1. Degrees of cooperation (can vary from no co-operation up to complete co- operation) 2. Number of players- 2 up to n These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.

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