10. Mixed strategies in baseball, dating and paying your taxes

Game Theory (ECON 159) We develop three different interpretations of mixed strategies in various contexts: sport, anti-terrorism strategy, dating, paying taxes and auditing taxpayers. One interpretation is that people literally randomize over their choices. Another is that your mixed strategy represents my belief about what you might do. A third is that the mixed strategy represents the proportions of people playing each pure strategy. Then we discuss some implications of the mixed equilibrium in games; in particular, we look how the equilibrium changes in the tax-compliance/auditor game as we increase the penalty for cheating on your taxes. 00:00 - Chapter 1. Mixed Strategy Equilibria: Example (Continued) 12:49 - Chapter 2. Mixed Strategy Equilibria: Other Examples in Sports 23:41 - Chapter 3. Mixed Strategy Equilibria Interpretation 1: Literal Randomization 28:17 - Chapter 4. Mixed Strategy Equilibria Interpretation 2: Players' Beliefs about Each Other's Actions 47:04 - Chapter 5. Mixed Strategy Equilibria Interpretation 3: Prediction of Split on Two or More Courses of Action in a Large Population 59:52 - Chapter 6. Mixed Strategy Equilibria: Policy Applications Complete course materials are available at the Yale Online website: online.yale.edu This course was recorded in Fall 2007.