Lec 1 - Introduction: five first lessons

"Lec 1 - Introduction: five first lessons" Game Theory (ECON 159) We introduce Game Theory by playing a game. We organize the game into players, their strategies, and their goals or payoffs; and we learn that we should decide what our goals are before we make choices. With some plausible payoffs, our game is a prisoners' dilemma. We learn that we should never choose a dominated strategy; but that rational play by rational players can lead to bad outcomes. We discuss some prisoners' dilemmas in the real world and some possible real-world remedies. With other plausible payoffs, our game is a coordination problem and has very different outcomes: so different payoffs matter. We often need to think, not only about our own payoffs, but also others' payoffs. We should put ourselves in others' shoes and try to predict what they will do. This is the essence of strategic thinking. 00:00 - Chapter 1. What Is Strategy? 02:16 - Chapter 2. Strategy: Where Does It Apply? 02:54 - Chapter 3. (Administrative Issues) 09:40 - Chapter 4. Elements of a Game: Strategies, Actions, Outcomes and Payoffs 21:38 - Chapter 5. Strictly Dominant versus Strictly Dominated Strategies 29:33 - Chapter 6. Contracts and Collusion 33:35 - Chapter 7. The Failure of Collusion and Inefficient Outcomes: Prisoner's Dilemma 41:40 - Chapter 8. Coordination Problems 01:07:53 - Chapter 9. Lesson Recap Complete course materials are available at the Open Yale Courses website: http://open.yale.edu/courses This course was recorded in Fall 2007.

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