ECON C110 Lecture Notes - Lecture 1: Brinkmanship
Document Summary
Econ c110: game theory in the social sciences: introduction. Game theory is a set of tools to study how a situation involving strategic interaction will turn out. These situations usually have few actors, and the most important thing is deciding what the best course of action is for one actor, based on making guesses about what the other is going to do as well. Thus, we have to guess the other"s guess, and the situation becomes a logical circle. We will learn tools for making predictions (matrixes, trees) and learn how they will play out. If this threat turns to a disaster, it affects both, but if one of the two countries gives in, they will lose a lot of prestige/money/etc. The other party"s fear is their leverage to make them give in and exert influence, but our party also is afraid and the other will use that fear as well.
