1. Strategic Moves and Brinkmanship

2. Preface Players are rational and know how the game will be played and the subsequent payoff. What can player do to alter the predicted outcome?

3. Strategic moves Devices to manipulate the way the game is played. To add an 1st stage (like direct communication) but alter the way the game is played 3 types of 1st stage action  Commitments  Threats  Promises

4. Interaction between parents and kids Watch TV, etc

5. Commitment-unconditional strategic move Chicken Dean SwerveStraight James Swerve0, 0-1, 1 Straight1, -1-2, -2

6. Commitment By restricting Freedom of Act SwerveStraight Swerve0, 0-1, 1 Straight1, -1-2, 2 SwerveStraight 1, -1-2, 2 James Uncommitted Committed

7. By Changing payoff SwerveStraight Swerve0, 0-1, 1 Straight1, -1-2, 2 SwerveStraight Swerve-3, 0-4, 1 Straight1, -1-2, 2 James Uncommitted Committed

8. Threats-conditional strategic move Trade Japan OpenClosed U.S. Open4, 33, 4 Closed2, 11, 2

9. OpenClosed Open4, 33, 4 Closed2, 11, 2 U.S. No threat Threat Japan Closed Open (1, 2) (4, 3)

10. Promise-conditional strategic move How will the game tree look like? Difference in threat and promise. AggressivePeaceful Aggressive200, 200320, 100 Peaceful100, 320250, 250

11. Brinkmanship Cuban Missile Crisis Brinkmanship-a vague threat, not controlled by the player.