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Auction with independent private values - An example from Game Theory: Analysis of Conflict by Roger Myerson

(1) The auction is a Bayesian game. Players' types are their values, and their actions are their bids. A strategy in a Bayesian game is a function mapping types to actions. Here, this is a "bid-...
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Using Variance for Nash Equilibrium

There's no need to consider the variance of payoffs when playing mixed strategies. Players' attitudes towards risk is already taken account of. This is because the "payoff" they receive is ...
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Can There Be a Dominant Strategy If Both Firms Choose to Match the Lowest Price in the Market in a Bertrand Model of Competition?

Let $D(p)$ for the good when the selling price is $p$ and let $c$ be the unit cost for both firms. Let $p^m$ denote the unique profit-maximizing monopoly price (assuming one exists). Assume that all ...
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Equilibrium of Perturbed Dollar Auction Game - An Example from Game Theory: Analysis of Conflict by Roger Myerson

Let us describe the mixed strategy played by both players 1 and 2 using the probability density function $f$. We say that a pure strategy $x$ is in the support $S$ of a mixed strategy $f$ if $f(x)>...
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Nash Equillibrium - Depend On The Opponent's Strategy?

The definition of a NE is not that a player cannot increase his payoff by changing his action, its that he cannot increase his payoff by changing his strategy. A strategy in a repeated game is a "...
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