ECN 340 Lecture Notes - Lecture 9: Coordination Game, Arteriosclerosis, Game Theory
16 Jan 2018
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Document Summary
Sometimes incentives (and disincentives) result not from the legal system or the presence of the aids virus, but from the actions of other people: your spouse, your boss, or your opponent at the card table. Human being will try to anticipate on another"s desires and strategies, try to respond to them and perhaps to thwart them. To understand the complexities of these interactions, we need a special branch of economics: game theory. In the 1920"s, one of the most brilliant men in the world, john von neumann, decided to work out the correct way to play poker, which is the human game of secrets and lies. Von neumann called it game theory because he reasoned that if you want a theory to explain human interactions, you need a theory that can explain poker. Von neumann developed a rational explanation for much of life, and his theory would eventually be applied to:
