Unit 4.5 4.6 Flashcards
Explain invisible hand game
If a game had an NE and it’s also socially optimal
What is an assurance game
2 NE
same strategy
Same NE is preferred by both players
What is the battle of the sexes game
2 NE
Same strategy
Players prefer different NEs
What is the prisoners dilemma game
The dominant strategy equilibrium outcome is worse for both players than the dominated strategy outcome
The payoff of dominant is worse than dominated
What is the mutual benefit known as
Cooperate
What is known as the dominant strategy
Defect
What are the characteristics of public goods
Non excludable : not excluding others
Non rivalrous : won’t prevent others
What is one shot vs repeated interactions ?
People don’t contribute to public goods because they have no individual incentive to do so
People interact differently based on how often they see you
Care about reputations
