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| | | | Lecture 4 17 Sep 07 Se Peoatty Kick Came ork Jn Fectseanth v. Liverpool WR ie Hoo chance Of Sewing Eu,(1, pt) wir M is oor a BR to any belief Do aot shoot te middle Lesson Countess you are Germen) Lesson Do not Choose a stategy thet is never a BR to any belief peal nvenbers "LU = natucal @ A SDE eespont'y Delo Player i's strtegy 5 Ha tenestategy Sy oF ether players i UG 5..) 7; (55) Freall 80 is, sles max ay (5; ,5.{) et oS 5 (@ Defe— Phayee Cs Sratgy 5 is « BR] fore belief P aboor fhe others’ chices if Eu p) > Euils:, 6) feallse' ic - Or = S; selves max fp Eu; (S;,P) Example EU, (bp) = peu, Cb, e+ plu, (Lye) Pactnees hip Game + Lageats own firm jointly , Share 50% profit each "each agent Chooses effort buel fe pot into the Fem Ss £04] «Fem profit is given by Ws tes%] “Contin vom of strategies" Complementary / syaeegy £bs b o sos iy “pas U5 )2 Lt Ge3,465,5) | WG. SCAG ts, thes) ]- 5.4 efor Cost max 2 (5,75, rb55,)- 5,7 5 ny earn dferentiate c, (2cunb5,)-25) 5 daw BR, BR, fethe cue b= BR, G,)2 It GS. Sizes, SB = itos Cedster Open Yale courses Dr “2 ov ) ekineRicivatly low effurt , because at the margin Lenly captvre 4 tre benefit I putin, ot L absre ay the cost of the effort 77 EXTERNALITY Sa Nach Equilibrven —<¢ intersection of lines, Cin tis yeaph) “py The pleyers are playi a best cesponse fe each other 9 re

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