
Summary
College football season kicks off with a focus on the unique rituals and superstitions of fans, as Hilton introduces its "superstition concierge" service. This initiative aims to cater to fans' quirky requests, such as securing rooms that align with lucky numbers or ensuring that lucky jerseys are not washed. The campaign emphasizes Hilton's commitment to hospitality, especially during game days.
The discussion then shifts to game theory, specifically exploring ultimatum and bargaining games. In a simplified ultimatum game, one player makes a take-it-or-leave-it offer regarding a dollar, while the other player can either accept or reject the offer. The analysis reveals that players often reject low offers, contrary to the predictions of backward induction, which suggests they should accept any non-zero offer. This behavior highlights the influence of pride and fairness in decision-making.
The conversation progresses to more complex bargaining scenarios, including two-stage and multi-stage games, where the dynamics of offers and rejections evolve. As players anticipate future offers, they adjust their strategies, leading to different outcomes compared to the initial ultimatum game. The analysis underscores the importance of understanding human behavior in bargaining situations, where factors like impatience and the perceived value of offers can significantly impact the negotiation process.
Show Notes
Game Theory (ECON 159)Uploaded 20-11-08We develop a simple model of bargaining, starting from an ultimatum game (one person makes the other a take it or leave it offer), and building up to alternating offer bargaining (where players can make counter-offers). On the way, we introduce discounting: a dollar tomorrow is worth less than a dollar today. We learn that, if players are equally patient, if offers can be in rapid succession, and if each side knows how much the game is worth to the other side, then the first offer is for an equal split of the pie and this offer is accepted. But this result depends on those assumptions; for example, bargaining power may depend on wealth.00:00 - Chapter 1. Ultimatum Games: Why Backward Induction Fails Here14:15 - Chapter 2. Bargaining Games: Setup and Generalization 47:44 - Chapter 3. Bargaining Games: Summary of Proof of Generalization54:29 - Chapter 4. Bargaining Games: Assumptions and ConclusionsComplete course materials are available at the Yale Online website: online.yale.eduThis course was recorded in Fall 2007. Learn more about your ad choices. Visit megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices
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