1. 1 G601, IO I Eric Rasmusen, erasmuse@indiana.edu 31 August 2006 2– Info This is for one 75 minute session on the chapter. The big idea is bayesian equilibrium.

2. 2 Readings 31 August, Thursday Information Chapter 2, Games and Information.2, Due 5PM Saturday Sept 2: The HTML project. 5 September, Tuesday. Due: Problem Set 1: 1.1, 1.11, 2.3, 2.5.

3. 3 Handouts Cardstock and pen for name plate REMINDERS Pictures today Do PS 1 for Tuesday If you want a problem partner, email me. Do HTML page for Saturday 5pm NEW: If you DO have a problem set partner, please email and tell me.

4. 4 sdfsd sdf

5. 5 Definitions

6. 6 sdfsd sdf

7. 7 What if Jones does not know which of these three games he is playing? --he does have guesses of probabilities subjective probabilities--- of 70%, 10% 20% sdf

8. 8 This is the Harsanyi Transformation. A game of incomplete information sdf

9. 9 sdfsd sdf

10. 10 sdf

11. 11 sdfsd sdf That is Bayes Rule. I will derive it on the board.

12. 12

13. 13 sdfsd sdf From the previous page:

14. 14 sdfsd sdf From the previous page:

15. 15 sdf Use the three step procedure. 1.Propose an equilibrium. 2.What beliefs are generated? 3. Would anyone deviate?

16. 16 sdfsd sdf From the previous page:

17. 17 Bayes Rule

18. 18 sdfsd sdf (From the previous page)

19. 19 Joness Strategy if Smith Chooses Small

20. 20 sdf

21. 21 Bayes Rule

22. 22

23. 23 Course Website A link to the course website http://www.rasmusen.org/g601/0.g601.htm

24. 24 The Battle of the Sexes