In this lecture we introduce game theory, following recap over the risk and insurance parts of the module we looked at last week. Game theory is the study of strategic interaction. In this lecture we looked at the history of game theory and the components of any game: players, strategies, and payoffs. We also discussed the first equilibrium concept we are going to see: the Nash equilibrium.

Let us look at a few games in normal and Iterated forms, and talk about solution methods for these games when talking about the Prisoner's dilemma. Click below for lecture notes, links, and a podcast of the lecture.

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