Economics 2182A/B Lecture Notes - Lecture 8: Nash Equilibrium, Weighted Arithmetic Mean
19 Nov 2018
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Penalty kick example: the goalie is trying to block, and the kicker is trying to score. If the kicker always kicks to the same side, the goalie will be able to predict the next kick and will always jump to that side. If the kicker knows the goalie knows you always kick to the right, you will kick to the left. Knowing that, the goalie will always jump to the left. Knowing that, the kicker will kick to the right. Can we get to an equilibrium: no either of the players has an incentive to do otherwise (they won"t play one fixed strategy) ); soccer (should you kick to the left or the right?) Just enough so that the other party doesn"t know what you will be doing next. (keep them guessing. ) Since it is symmetric, there is no reason to play anything else than 50/50: for example, when playing rock/paper/scissors, you should play each strategy.
