This lesson contains 20 slides, with text slides and 1 video.
Items in this lesson
Chapter 6
6.1 Keep Quiet or communicate
Slide 1 - Slide
Planning
Quick review
Check homework
Explanation 6.1
Do the questions
Slide 2 - Slide
Quick review
Answer the following questions:
What is the difference between fixed and current assets?
How do you calculate the depreciation costs?
What is break-even?
How do you calculate the break-even sales?
Slide 3 - Slide
Homework 5.4 (Q. 46, 48, 52, 53)
Slide 4 - Slide
Explanation 6.1
Learning objectives:
You can explain why the economy uses the game theory
You can explain the prisoner's dilemma and give an example
You can read a payoff matrix and analyse wheter there is a prisoner's dilemma or not
You can explain that self-binding plays an important role at solving a prisoner's dilemma
Slide 5 - Slide
Game theory
When you have to make financial choices, you weigh revenues and costs (risks)
Slide 6 - Slide
Game theory
When you have to make financial choices, you weigh revenues and costs (risks)
We assume that everyone makes rational decisions based on this...
Slide 7 - Slide
Game theory
When you have to make financial choices, you weigh revenues and costs (risks)
We assume that everyone makes rational decisions based on this...
... but is that the case?
Slide 8 - Slide
Game theory
When you have to make financial choices, you weigh revenues and costs (risks)
We assume that everyone makes rational decisions based on this...
... but is that the case?
We study this with game theory
Slide 9 - Slide
Game theory
A mathematical way to gain insight in decision making. It analyses the logical outcome of a dilemma if two or more participants make rational decisions.
Slide 10 - Slide
Prisoners' dilemma
Best known game in game theory is the prisoners' dilemma
This is a simultaneaous game: the two prisoners can respond to the dilemma at the same time
Slide 11 - Slide
Prisoners' dilemma
The prisoners' dilemma is some imaginary problem prisoners can be confronted with. If every opponent puts its own interest first, the result is not optimal.
Slide 12 - Slide
STORY TIME
The prisoners' dilemma
Slide 13 - Slide
Conclusion of the story...
Slide 14 - Slide
Pay-off matrix
Outcomes of the prisoners' dilemma in a table
With a dominant strategy a player always chooses one option, no matter what the other does.
Slide 15 - Slide
Price war
A typical game situation can arise between for example supermarkets.
A price reduction by the one company results in the same reaction from the competitor. Because of this, a price war can arise.
Slide 16 - Slide
Self-binding
In case of self-binding, a company says what they are going to do in a dilemma and do not let others influence them.
The opposite of self-binding is cooperating.
Slide 17 - Slide
Slide 18 - Video
After watching the video
What would you do?
What do you think of the strategy that was played?
Is this a prisoners' dilemma?
Slide 19 - Slide
Get to work!
Do Q 1 - 13 (= HOMEWORK)
Questions? Raise your hand Quietly discuss with your neighbour
