We will see just how predictable the equilibrium is in a wide variety of games. The Nash equilibrium is derived analytically and, thus, is highly predictable. Thus, in a Nash equilibrium, all players have chosen respective strategies that are the best responses to each of the other players’ strategies. Simply put, a Nash equilibrium prevails when each player can no longer adjust his or her strategy to obtain added payoff. We expect that Homo economicus will attain what’s known as a Nash equilibrium, or perhaps a refinement of Nash equilibrium, depending upon the game being played. The keywords are players, strategies, rules, order, moves, information, and payoffs. If you’ve ever played a board or card game with your friends or family, then none of this terminology should surprise you.Ī game consists of a set of “players,” each with their own set of “strategies.” Precise “rules” govern the “order” in which players make their “moves,” the “information” they have available, and, ultimately, their “payoffs.” I don’t know about you, but the card game poker comes immediately to mind. ![]() Temptation and Self-Control – The Case of Potato Chipsħ Some Classic Games of Iterated Dominanceīefore diving into the deep pool of behavioral game theory, we need some specific nomenclature about what constitutes a game and its solution, or what we have been calling its equilibrium.The Persistence of Political Misperceptions. ![]() Lessons From an ‘All-You-Can-Eat’ Experiment.Reluctance to Sell in the Housing Market.Endowment Effects Among Experienced Versus Inexperienced Traders.Optimistic Overconfidence in the Stock Market.Anticipated Versus Unanticipated Income.Stopping Procrastination Dead With Deadlines.Beneficial Biases in Strategic Decision-Making.Text Messaging to Improve Public Health.Promoting Environmental Conservation in Hotel Rooms.Contingency Management of Substance Abuse.The Effects of Conceptual Information on the Consumption Experience.The Behavioral and Psychological Effects of Money.Employer-Provided Retirement Savings Plans.Savings Plans for the Time-Inconsistent.Corruption in Emergency Ambulance Services.Interpersonal Dynamics in a Simulated Prison.Are Cigarette Smokers Hyperbolic Time Discounters?.Awareness Reduces Racial Discrimination. ![]() Discrimination in the Weakest Link Game Show.
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