文档介绍：Part 3. Oligopoly pricing
Game theory 1
Classic models of oligopoly
Game theory 2
Dynamic models of oligopoly
Product differentiation
Identifying and measuring market power
Game theory 1
Why game theory
Foundations and principles
Static games plete information
Summary
Why game theory?
Game-theoretic situation: payoff interdependency or strategic interdependency.
Payoff interdependency exists when the optimal choice by an agent depends on the actions of others.
The mutual dependency of payoffs on the actions by all players defines a game-theoretic situation. In contrast, decision-theoretic situations are when there is no recognized payoff interdependence: the payoffs or profits of an action are determined without considering the choices of others.
Examples of decision-theoretic and game-theoretic situations
Noncooperative game theory is a set of tools that is used to model the behavior or choices of players when the payoffs of a choice depends on the choice of other players.
Recognized payoff interdependency gives rise to interdependent decision making. The optimal choice of a player will depend on her expectation of the choices of others playing the same game.
Foundations and principles
The basic elements of a game
Any game has 4 elements which define the structure of of the game.
1. players: the identity of those playing the game.
2. rules: the rules of the game specify three things: (a) the timing of all players’ moves; (b) the actions available to a player at each of her moves; and (c) the information that a player has at each move.
3. es: the e of a game depends on what each player does when it is her turn to move. The set of es is determined by all of the binations of actions taken by players.
4. payoffs: the payoffs of the game represent the players’ preferences over the es of the game.
Types of games(1)
Classify games on the basis of (a) the timing of moves and (b) uncertainty about the payoffs of rivals.
Static game: each player moves once, and when