Lecture 5 - Nash Equilibrium: Bad Fashion and Bank Runs

We first define formally the new concept from last time: Nash equilibrium. Then we discuss why we might be interested in Nash equilibrium and how we might find Nash equilibrium in various games. As an example, we play a class investment game to illustrate that there can be many equilibria in social settings, and that societies can fail to coordinate at all or may coordinate on a bad equilibrium. We argue that coordination problems are common in the real world. Finally, we discuss why in such coordination problems–unlike in prisoners’ dilemmas–simply communicating may be a remedy.

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Lecture 5 - Nash Equilibrium: Bad Fashion and Bank Runs is an episode from Yale Open Courses ECON 159: Game Theory by William Sheppard.

This episode is 01:09:13 long.

This episode was published on Jun 3, 2018.

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