Anticipating Comeptitive Dynamics - Cassiman and Ghemawat

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  1. Simple game
    1. Steps in a simple game
      1. Identiy the players
      2. specify the possible actions for each of the players (possible strategies)
      3. Determine the payoffs for each of the players in each combination of strategies
        1. This can initially be a goal but should be turned into a numerical value
        2. Find the NPV of these values
    2. Assumptions considered
      1. Are the moves simultaneous or dynamic
    3. Strategy to solve the game
      1. Find the dominant strategy for one player
        1. a dominant strategy is when one player that would lead to the less than ideal outcome no matter what the other player does.
        2. This can be used to narrow a set of outcomes
      2. Go to the second player and find the domiant strategy, and elimate those outcomes
      3. Interate till there is only one strategy pair left. This is called the Nash Equalibrium.