Lecture 5 - Extensive Form Game

03.18

Instructor: Yaodong Yang

Topics Covered

1. Extensive Form Game

   • 1.1 Definition
   • 1.2 Example: New Product Development Game
   • 1.3 Game Tree
   • 1.4 Information Set
     • 1.4.1 Definition
     • 1.4.2 Example: Kuhn Poker
   • 1.5 Perfect Recall

2. Strategy and Nash Equilibrium in Extensive Form

   • 2.1 Strategy
   • 2.2 Example

3. Comparison between Static and Extensive Form Games

   • 3.1 Static Game: Static Model
   • 3.2 Extensive Form Game: Dynamic Model
   • 3.3 Example: The Prisoner’s Dilemma

4. Subgame Perfect Nash Equilibrium (SPNE)

   • 4.1 Subgame
     • 4.1.1 Example: New Product Development Game
     • 4.1.2 Solution Refinement in Subgames
     • 4.1.3 Definition
     • 4.1.4 Example: Pirate Gold Division Game
     • 4.1.5 Distribution Game Problem
     • 4.1.6 Kuhn’s Theorem
   • 4.2 Subgame Perfect Nash Equilibrium Refinement
     • 4.2.1 Example
     • 4.2.2 Backward Induction
     • 4.2.3 Complete Information vs. Perfect Information
     • 4.2.4 SPNE vs. Nash Equilibrium
     • 4.2.5 Incredible Threats and Their Elimination
     • 4.2.6 Backward Induction vs. Iterated Elimination of Strictly Dominated Strategies (IESDS)
   • 4.3 Rationality and Uniqueness
     • 4.3.1 Example: Chain Store Game
     • 4.3.2 Example: Centipede Game
     • 4.3.3 Backward Induction in Subgames
     • 4.3.4 Principle of Uniqueness
   • 4.4 Subgame Perfect Nash Equilibrium under Imperfect Information