General linear models Suppose that we have a model: 1 It is inherently linear for the parameters if it can be transformed into Examples: 1. Exponential model: Y

What is a Monte Carlo simulation? Monte Carlo simulation is numerical method based on the extensive use of random numbers for solving different problems. Remark: Monte Carlo simulation can be used tostudy not only stochastic problems (e.g., diffusion) but also non stochastic ones (Monte Carlo

DESIGN METHODOLOGY: INPUT-OUTPUT DECISIONS goaL-- Choose the process chemistry and feedstock most appropriate to the plant to be designed and determine the associated economic potential

One of the merits of the notion of sequential equilibrium is the emphasis on out-of- equilibrium beliefs-that is, on beliefs (about past and future play)at information sets that should not be reached if given equilibrium is played. The key insight of extensive-form analysis is that out-of-equilibrium beliefs deter. mine equilibrium behavior. For instance, consider the simple two-stage entry deter- rence game in which potential entrant decides whether to enter a market or stay out, and the incumbent decides whether to fight or acquiesce after the entrant's move

By and large, I will follow OR, Chap. 8, so I will keep these notes to a minimum. ] The theory of repeated games is a double-edged sword. On one hand, it indicates how payoff profiles that are not consistent with Nash equilibrium in a simultaneous-move game might be achieved when the latter is played repeatedly, in a manner consistent with Nash or even subgame-perfect equilibrium

ome of the theoretical exercise I will assign are actually well-known results; in other cases you may be able to find the answer in the literature. This is certainly the case for the current My position on this issue is that, basically, if you look up the answer somewhere it's your problem. After all, you can buy answer keys to most textbooks. The fact is, you will not

The notion of subgame perfection is the cornerstone of the theory of extensive games. It embodies its key intuitions-and provides a vivid example of the difficulties inherent in such a theor But, above all, it has proved to be extremely profitable in a variety of applications. More- over, it has spawned a huge theoretical literature which has attempted(often successfully

Class: Tue-Thu 10: 40-12: 10 [?] Room 317, Bendheim. OH, by appointment. The Big Picture Most of you will already have used some of the tools of GT in your core courses. You will probably be familiar with the notions of simultaneous us. extensive-form game, perfect vs. imperfect information, complete us. incomplete information, Nash

This lecture focuses on the interpretation of solution concepts for normal-form games. You will recall that, when we introduced Nash equilibrium and Rationalizability, we mentioned numerous reasons why these solution concepts could be regarded as yielding plausible restric-

Signaling games are used to model the following situation: Player 1, the Sender, receives some private information and sends a message m E M to Player 2, the Receiver. The latter, in turn, observes m but not 0, and chooses response r E R. Players'payoffs depend on 0, m and r. What could be simpler? Yet, there is a huge number of economically interesting games that fit nicely within this framework: Spence's job market signaling model is the leading example, but applications abound in IO (limit pricing, disclosure...) finance (security design) and political economics