Microeconomics II-1:
Fiches d'apprentissage et de révisions
Fiches d'apprentissage et de révisions
Extensive and Strategic Forms
Objective: building a strategic model.
• Introduction of main notions.
• Examples and applications.
• We won’t solve the games yet !
Games Ingredients
• Who are the players (decision makers)?
• What moves are available to each player and when ? => Strategies.
• What does each player know at the time of each of his decisions ? => Information.
• What are the outcomes and payoffs at the end?
Road Map
1. Extensive form representation
2. Strategies
3. Strategic form representation
Extensive form: perfect information
• a set of players
• a tree
• an informational partition (to be made precise)
• a payoff for each player at each terminal node.
Sharing Game
• Two agents, Andy and Barb.
• Two identical items.
• Andy choose first: (i) he keeps both items, (ii) they share or (iii) he gives both items to Barb.
• Then Barb gets to either reject the allocation or accept the allocation.
Sharing Game: decision tree
• A decision tree is read from top to bottom.
• Each of the dots is called a decision node, which represents a point at which someone has a decision to make.
• Some branches come out of a decision node. A branch represents a different action available to the decision maker.
Sharing game: tree
Trivia
the “ultimatum game”
One of the most studied game in economics, sociology and psychology.
In the original game «Andy» chooses the amount to give to the other player.
When carried out between members of a shared social group (e.g., a village, a classroom…)
people offer "fair" (i.e., 50:50) splits, and offers of less than 30% are often rejected
Common chimpanzees behaved similarly to humans by
proposing fair offers in one version of the ultimatum game involving direct interaction between the chimpanzees.
Presence of
inequality aversion or altruistic punishement (punishement for unfair split).
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Flashcards
Extensive and Strategic Forms
Objective: building a strategic model.
• Introduction of main notions.
• Examples and applications.
• We won’t solve the games yet !
Games Ingredients
• Who are the players (decision makers)?
• What moves are available to each player and when ? => Strategies.
• What does each player know at the time of each of his decisions ? => Information.
• What are the outcomes and payoffs at the end?
Road Map
1. Extensive form representation
2. Strategies
3. Strategic form representation
Extensive form: perfect information
• a set of players
• a tree
• an informational partition (to be made precise)
• a payoff for each player at each terminal node.
Sharing Game
• Two agents, Andy and Barb.
• Two identical items.
• Andy choose first: (i) he keeps both items, (ii) they share or (iii) he gives both items to Barb.
• Then Barb gets to either reject the allocation or accept the allocation.
Sharing Game: decision tree
• A decision tree is read from top to bottom.
• Each of the dots is called a decision node, which represents a point at which someone has a decision to make.
• Some branches come out of a decision node. A branch represents a different action available to the decision maker.
Sharing game: tree
Trivia
the “ultimatum game”
One of the most studied game in economics, sociology and psychology.
In the original game «Andy» chooses the amount to give to the other player.
When carried out between members of a shared social group (e.g., a village, a classroom…)
people offer "fair" (i.e., 50:50) splits, and offers of less than 30% are often rejected
Common chimpanzees behaved similarly to humans by
proposing fair offers in one version of the ultimatum game involving direct interaction between the chimpanzees.
Presence of
inequality aversion or altruistic punishement (punishement for unfair split).
