Principles of Microeconomics / Unit 9 MIC 0823 short lesson, about 20 seconds
Game Theory and Payoffs
Captions available
The idea
Game theory studies choices whose outcomes depend on what other players choose. A payoff matrix lists each player's strategies and the result, usually profit, for every combination.
In practice
Two firms, two strategies each, four cells, two numbers in every cell.
Where people slip
Read the matrix one player at a time, asking what each does best given each thing the other might do.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
Unlocks
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