Week 10 - Strategic moves Flashcards

1
Q

What is the chicken game?

A

Your are driving on a narrow mountain road and see another car heading towards you. Do you swerve or keep driving?

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2
Q

What are the 2 NE in the chicken game?

A

Swerve, keeping driving
Keep driving, swerve

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3
Q

What is an unconditional strategic move?

A

Commitment to play a move which is not dominant. It is unconditional since it doesn’t depend on what others do

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4
Q

Give examples of conditional strategic moves (2)

A

Threats and promises. These are conditional moves because you specify how you would respond to a certain move of the other player

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5
Q

Describe commitment in the context of the chicken game

A

Create a pregame in which you would commit to drive straight, changing the game from simultaneous to sequential.

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6
Q

What are the two types of commitment and give an example.

A

Restricting own freedom e.g. throw steering wheel out the window so you have to drive straight
Change own payoff e..g so that drive straight becomes dominant. Give money to a 3rd party, which would not be returned unless you choose D.

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7
Q

What do you have to make sure when making a commitment in a pre game

A

The other players know about your commitment

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8
Q

What do threats and promises do?

A

Require players to choose an action that is not their best response

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