Nash Equilibrium - Bad Fashion and Bank Runs - Game Theory Lecture 5

Explore the concept of Nash equilibrium in this Yale University lecture on Game Theory. Begin with a formal definition of Nash equilibrium, then delve into its significance and methods for identifying it in various games. Participate in a class investment game to understand how multiple equilibria can exist in social settings, and how societies may struggle to coordinate or settle on suboptimal outcomes. Examine real-world examples of coordination problems and discuss how communication can potentially resolve these issues, unlike in prisoners' dilemmas. Cover topics such as the definition and examples of Nash equilibrium, its relation to dominance, and Pareto efficient equilibria in coordination games, including the investment game and other practical examples.