Abstract
Juan Carillo (USC): Introduction to stochastic elements of Game Theory
In this lecture, I will provide an introduction to game theory in static and dynamic games of complete and incomplete information. I will discuss the notions of Nash Equilibrium, Bayesian Nash Equilibrium, Subgame Perfect equilibrium and Perfect Bayesian Equilibrium. I will then illustrate the theory with some applications from mechanism design, such as auction theory. I will finally extend the theory to incorporate stochastic choices as well as best response to stochastic choice of others through the notion of Quantal Response Equilibrium.
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