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Lecture 5 - Nash Equilibrium: Bad Fashion and Bank Runs, Game Theory
Lecture 5 - Nash Equilibrium: Bad Fashion and Bank Runs,  Game Theory
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Lecture 5 - Nash Equilibrium: Bad Fashion and Bank Runs, Game Theory
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.
Channel: ACADEMIC EARTH
Category: Educational
Video Length: 0
Date Found: April 18, 2009
Date Produced:
View Count: 123
 
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