hi i'm william spaniel let's learn some some game theory
today were to be introducing this series game theory 101
and over the course of the next thirty to forty videos we'll be learning basic
introductory game theory so let's get to it
first let's talk about what game theory is game theory is simply the study of
strategically interdependent behavior
strategic interdependence is simply a way of describing situations where what
i do affects your outcomes
and what you do affects my outcomes
these types of situations could be just about winning and losing i know we think
of the word game immediately we think about types of games where i'm
trying to beat you and you're trying to beat me in only one of us can one and
only one of us can lose
but game theory allows us to be a little bit more broad with what we're doing
here our framework can be much more general than that and so we can talk about
situations were both trying to help each other win
and also situations that are somewhere in between where we have been incentives
to work together
but also incentives to beat the other guy in some sense
and game theory is going to allow us to study at all in a single way it's really useful
and to allude to what i am going to talk about next
why even bother with these thirty to forty videos? game theory will be
time-consuming it's gonna be logically demanding for us to learn but there is a
light at the end of the tunnel there is a reason and actually and giving you two
reasons why we should bother doing this first
we're talking about theories of interactive behavior the logic of
strategically interdependent situations can get extremely complicated
extremely fast so if we're going to develop logically sound theories
we need some sort of accounting standards to make sure that what we're
saying actually follows from our assumptions and gained three gives us
these accounting tools
that's one reason why we should study that
now more practical reason to study game theory is that
understanding these sorts of models allows us to quickly draw parallels from
one situation to another
and once you have this sort of thing down once you've spent the time invested
the time learning the basics of game theory
it allows you to connect these strange situations together which in turn allows
you to think on your feet much better than you can today in fact there's a
particular time that i will discuss later
in chapter two of this lecture series where i was in trouble with the police
and my knowledge of game theory allowed me to sort of get out of that
situation with very little cost to myself so we'll talk about that and why it was
really useful to me once we get there
this lecture series will cover three chapters in total we're going toi start out with
the basics
so in chapter one we're going to be talking about simultaneous move games these are games
where
players essentially have to come up with their strategies
independently and without observing what the other guy does and so some samples here
include soccer penalty kicks prison interrogation when you're isolated from
your fellow criminals
and deciding whether to stop for a drive at a stoplight
now over the course of this chapter if you're interested in seeing what were
actually cover we're going to talk about strict dominance iterated elimination strictly
dominate strategies pure strategy nash equilibrium best responses mixed strategy Nash
equilibrium and weak dominance i don't think you know any of those things
yet
but by the end of chapter one you'll have those things down I trust that
now in chapter we're going to move on to what we call extensive form games and this is a
opposite of what we are doing earlier before everyone was making their moves
at the same time here
the players are taking turns moving so some examples here
war and invasion plans and
police searches, so that's getting too what i was talking about before where i have to
decide whether to allow the police officer to search
and then once may have allow the police officers to do that then he decides
whether conduct a really thorough search or really simple search so these are times
just when we're taking turns moving
and items we'll cover in this chapter are backward induction something perfect
equilibrium credible threats tying hands commitment problems and forward induction
again i don't expect you to know any of that coming into this but by the end of
chapter two
you will have those things down
now, the last chapter will talk aboutadvanced strategic form games so this is
essentially what we covered in chapter one except we're gonna generalizes so this
allows us to ask
really important questions like this extra a striker kick left more frequently when
he's taking a penalty kick in soccer
as accuracy to the left side improves
and in this chapter we will be talking about comparative statics which is really the
heart and soul of game theory and knife-edge equilibria and symmetric zero something
now in terms of practical parts of this course, what are the prerequisites? well
if there is logically demanding but rarely requires more than high school
algebra
it will help you if you have had a semester's worth of calculus but even if you
haven't
you only miss out on with the essentially the last five percent of the course so even you if
you have tiny tiny tiny amounts of math you'll still be able to do this
me personally i got B's and C's in my high school math classes and now i do
this so
i'm capable of doing this i think you're probably people doing this as long as you
put in the time and effort really think about these things
now, grading: this is an online class let's not take ourselves so seriously congratulations by
watching this video you have already got an A in the course good job
let's never talk about grades again 'cause that's ridiculous
finally in terms of a textbook again this is an online class there are no
required text books because this is just a made up thing where you've already gotten an A
but that aside if you work interested and looking into getting a text book
this is what i recommend its Game Theory 101: The Complete Textbook there is an
obvious reason why I am recommending it to you it's because i
wrote it
but the reason i wrote it is so i could parallel the video series and doing here
and so what we will be doing in these lectures actually comes directly out of
the book but the book has many many many more examples in every lesson whereas
the video series we'll just have one per lesson and so it parallels the video
lectures very nicely it's also dirt cheap as I film this it is $3.99
on amazon so if that's going to be way cheaper than any other options out there
and then finally for practical reasons it's also a teaching book
if you look at most of the other text books on the market they don't really
teach game theory so much as they act as a reference manual for people who already
understand these sorts of things which is really not useful if you're
trying to learn game theory and so one the reasons i wrote it is to have a teaching
book out there that instead of
assuming that you basically already know game theory; it treats like you don't know
any game theory at all coming in and so
in the book i go really thoroughly into every step of logic and have all of the
mathematical calculations calculated line-by-line and step-by-step to really
make it as user-friendly as possible
text books also available ala carte so if you want to buy
one chapter each
or I guess one chapter for
all three chapters of the video lecture series you can,
though it is significantly more expensive than just buying everything upfront
but that's what i recommend and that actually wraps up or or any typing about
today
and in the next video--in the next lecture--we'll actually be getting to
solving a game and we're going to start with the prisoner's dilemma
join me in the next video. take care.