https://teddyrookbook.com/business/game-theory/Recent content in Game Theory: The Science of Strategy on Teddy Rook Bookhttps://teddyrookbook.com/img/share.jpghttps://teddyrookbook.com/img/share.jpgHugoenhttps://teddyrookbook.com/business/game-theory/auctions/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/auctions/Bid against computer rivals in first-price, second-price, English and Dutch auctions, run thousands of auctions to test revenue equivalence, and fall for the winner’s curse. Learn when to bid your value and when to shade.https://teddyrookbook.com/business/game-theory/bargaining/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/bargaining/Haggle over a $100 pie with computer opponents who differ only in patience, then find Nash’s solution by drawing the biggest rectangle. Learn the Rubinstein model, deadlines, outside options and the Nash bargaining solution.https://teddyrookbook.com/business/game-theory/cooperative-games/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/cooperative-games/Let players walk into a room one at a time and pay each what they add, find the splits no group would reject, and measure real voting power. Learn characteristic functions, the core, the Shapley value and power indices.https://teddyrookbook.com/business/game-theory/competition/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/competition/Watch two firms best respond their way to the Cournot equilibrium, start a Bertrand price war that ends at cost, and move ice-cream sellers along Hotelling’s beach to the median. Learn how to derive best responses, compare duopoly with monopoly and competition, and why cartels are unstable.https://teddyrookbook.com/business/game-theory/dominance/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/dominance/Cross out dominated actions step by step until a game solves itself, play the prisoner’s dilemma against bots, and watch a public-goods game unravel until punishment is allowed. Learn strict and weak dominance, iterated elimination and why rational players can all end up worse off.https://teddyrookbook.com/business/game-theory/evolutionary-games/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/evolutionary-games/Release a flock of hawks and doves and watch them find a balance, grow a kaleidoscope of cooperators on a grid, and follow lizards cycling like rock–paper–scissors. Learn evolutionarily stable strategies and the replicator equation.https://teddyrookbook.com/business/game-theory/games-and-payoffs/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/games-and-payoffs/Play “guess two thirds of the average” against a crowd that thinks at different depths, then build your own games and play them against computer opponents with personalities. Learn what a game is: players, actions, payoffs, the payoff matrix and common knowledge.https://teddyrookbook.com/business/game-theory/incomplete-information/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/incomplete-information/Run a used-car market where only sellers know which cars are lemons and watch it unravel, then rescue it with warranties and inspections. Learn types, beliefs, Bayes’ rule and Bayesian Nash equilibrium.https://teddyrookbook.com/business/game-theory/mechanism-design/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/mechanism-design/Run the deferred-acceptance algorithm that matches doctors to hospitals and students to schools, try to cheat it, and use a tax that makes honesty pay. Learn stable matching, the revelation principle, VCG and optimal auctions.https://teddyrookbook.com/business/game-theory/mixed-strategies/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/mixed-strategies/Play rock, paper, scissors against a bot that learns your patterns, then against one that can’t be beaten; solve any 2×2 game by sliding the mixes until the payoff lines cross; and take penalty kicks at minimax. Learn mixed strategies, the indifference principle and von Neumann’s minimax theorem.https://teddyrookbook.com/business/game-theory/nash-equilibrium/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/nash-equilibrium/Find Nash equilibria by underlining best responses in coordination games, chicken, the stag hunt and games with none, then test your instinct for focal points. Learn best responses, the definition of equilibrium, Pareto and risk dominance, and Nash’s existence theorem.https://teddyrookbook.com/business/game-theory/repeated-games/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/repeated-games/Run an Axelrod-style tournament of the repeated prisoner’s dilemma with tit for tat, grim trigger, win-stay lose-shift and a strategy you design, add mistakes, let winners multiply, and find the discount factor that makes cooperation pay. Learn trigger strategies, the folk theorem and reputation.https://teddyrookbook.com/business/game-theory/sequential-games/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/sequential-games/Build game trees and watch them solved from the leaves up, unmask an equilibrium held up by an empty threat, deter entry with a commitment, play the ultimatum and centipede games, and lead a market as a Stackelberg firm. Learn strategies, subgame perfection and the value of moving first.https://teddyrookbook.com/business/game-theory/signaling/Mon, 01 Jan 0001 00:00:00 +0000https://teddyrookbook.com/business/game-theory/signaling/Set how much school the good job requires and watch twenty job seekers decide whether a degree is worth it. Learn costly signals, perfect Bayesian equilibrium, cheap talk and screening menus.