Sequential Games: Moral Hazard, Incentives, and Backward Induction

Explore sequential games in game theory through this Yale University lecture, focusing on moral hazard, incentives, and strategic decision-making. Delve into the concept of backward induction and its application in analyzing games where players move sequentially. Examine a borrower-lender scenario to understand moral hazard and discuss potential solutions, including incentive design and commitment strategies. Learn about the importance of contracts in mitigating risks and the role of collateral in financial transactions. Investigate other commitment tactics, such as "burning boats," and their impact on game outcomes. Gain valuable insights into the significance of backward induction in strategic thinking and decision-making processes. This comprehensive exploration of sequential games provides a solid foundation for understanding complex economic and social interactions.

- Chapter 1. Sequential Games: Backward Induction.
- Chapter 2. Sequential Games: Moral Hazard.
- Chapter 3. Sequential Games: Incentive Design.
- Chapter 4. Sequential Games: Commitment Strategies.
- Chapter 5. Sequential Games: Backward Induction Is Really Important.