Topic 8 Flashcards
1
Q
What is a constant-sum & Non-constant sum game?
A
In the constant sum game the interests of players are directly opposed.
Otherwise not.
2
Q
What is the normal and extensive form represnetation of a game?
A
Normal form is payoff matrix.
Extensive form is a tree diagram.
3
Q
Nash Equilibrium
A
When given the strategies of the other players, no
player can improve his payoff by unilaterally changing his own
strategy. (strategically stable and self‐enforcing)
4
Q
What concepts give an alternative outcome to the duopolists dillema?
A
- Price match guarentees.
- Repeat games with retaliation
