Game Theory

6.

Dynamic Games and Sequential Decision-Making

6.1.

Extensive Form Games

6.1.1.

6.1.1.1.

Nodes and Branches

6.1.1.2.

Information Sets

6.1.1.3.

6.1.2.

Strategies in Extensive Form

6.1.2.1.

Pure Strategies as Plans

6.1.2.2.

Behavioral Strategies

6.1.2.3.

Mixed vs. Behavioral Strategies

6.1.3.

6.1.3.1.

Definition and Identification

6.1.3.2.

Proper Subgames

6.1.3.3.

Subgame Boundaries

6.2.

Backward Induction

6.2.1.

Solution Method

6.2.1.1.

Terminal Node Analysis

6.2.1.2.

Recursive Optimization

6.2.1.3.

Unique Solution Path

6.2.2.

6.2.2.1.

Finite Horizon Games

6.2.2.2.

Perfect Information Games

6.2.2.3.

Sequential Bargaining

6.2.3.

6.2.3.1.

Incredible Threats

6.2.3.2.

Multiple Equilibria

6.3.

Subgame Perfect Equilibrium

6.3.1.

Definition and Properties

6.3.1.1.

Sequential Rationality

6.3.1.2.

Credible Strategies

6.3.1.3.

Refinement of Nash Equilibrium

6.3.2.

6.3.2.1.

Backward Induction Algorithm

6.3.2.2.

Pruning Incredible Threats

6.3.2.3.

Multiple Subgames

6.3.3.

6.3.3.1.

Stackelberg Competition

6.3.3.2.

Entry Deterrence

6.3.3.3.

Bargaining Models

6.4.

Commitment and Credibility

6.4.1.

Strategic Commitment

6.4.1.1.

Irreversible Actions

6.4.1.2.

Reputation Building

6.4.1.3.

Burning Bridges

6.4.2.

Credible Threats and Promises

6.4.2.1.

Ex-Ante vs. Ex-Post Incentives

6.4.2.2.

Commitment Devices

6.4.2.3.

Time Consistency

6.5.

6.5.1.

Finite Repetition

6.5.1.1.

Chain-Store Paradox

6.5.1.2.

Backward Induction Logic

6.5.1.3.

Reputation Effects

6.5.2.

Infinite Repetition

6.5.2.1.

Discount Factors

6.5.2.2.

Present Value Calculations

6.5.2.3.

Long-Term Relationships

6.5.3.

6.5.3.1.

Feasible and Individually Rational Payoffs

6.5.3.2.

Trigger Strategies

6.5.3.3.

Punishment and Forgiveness

6.5.4.

Specific Strategies

6.5.4.1.

6.5.4.2.

6.5.4.3.

Generous Tit-for-Tat

6.5.4.4.

Win-Stay, Lose-Shift

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5. Classic Static Games

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7. Games with Incomplete Information