24
Lectures
30
minutes/lecture
1.
The World of Game Theory
"Games" apply to all aspects of life. You're introduced to the subject with a perplexing dilemma, a brief history of the field, and some of its applications, and the three fundamental components of any game: players, strategies, and payoffs.
1.
The World of Game Theory
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13.
Whom Can You Trust?—Signaling and Screening
This lecture uses examples from mythology, the animal world, movies, card games, and real life to show you how players in a game of asymmetric information try to convey information, elicit it, or guard it.
13.
Whom Can You Trust?—Signaling and Screening
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2.
The Nature of the Game
You gain a deeper insight into the essential building blocks of players, strategies, and payoffs—most of them more complex and subtle than they might appear—along with two new concepts, rationality and common sense.
2.
The Nature of the Game
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14.
Encouraging Productivity—Incentive Schemes
How do you get others to do what you want them to do, whether in business, politics, international relations, or daily life? You learn how players create an alignment between the behavior they desire and the rewards other players receive and examine what can be done when the behavior being addressed is not directly observable.
14.
Encouraging Productivity—Incentive Schemes
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3.
The Real Life Chessboard—Sequential Games
In seeking the optimal strategies for games in which players take turns and where the full history of the game is known to all, you learn how to construct a "game tree" and are introduced to one of game theory's key concepts: the Nash equilibrium.
3.
The Real Life Chessboard—Sequential Games
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15.
The Persistence of Memory—Repeated Games
Although the games so far have been simplified examples assuming no previous or subsequent interactions, real-life games generally don't work that way. This lecture uses an iterated game of Prisoner's Dilemma to examine the impact of repeated interactions on determining optimal strategy.
15.
The Persistence of Memory—Repeated Games
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4.
Life's Little Games—The 2 x 2 Classic Games
You examine four classic two-player games, with each player considering his or her own two choices. Simple though they may be, these games appear at the heart of larger, more complicated games and provide important insights into dealing effectively with others.
4.
Life's Little Games—The 2 x 2 Classic Games
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16.
Does This Stuff Really Work?
Can game theory accurately model real-world behavior? You examine some reasons that its track record for predicting behavior in some designed experiments and some observed behavior has been mixed.
16.
Does This Stuff Really Work?
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5.
Guessing Right—Simultaneous Move Games
You learn a general way of representing simultaneous-move games—where players make decisions without knowing those of others—and acquire valuable tools to solve them. Military and business examples are used to introduce the minimax approach, the iterated elimination of dominated strategies, and the best response method.
5.
Guessing Right—Simultaneous Move Games
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17.
The Tragedy of the Commons
You explore what is essentially a many-player version of Prisoner's Dilemma. Each player's self-interested choices ironically contribute to a social dilemma in which every player suffers, in a scenario equally applicable to topics as diverse as global warming, traffic congestion, and the use of almost any nonrenewable resource.
17.
The Tragedy of the Commons
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6.
Practical Applications of Game Theory
Applying what you've learned, you see how a stock bid of $98 can beat one of $102; how insisting you lose a competition can be a winning strategy; and why being blackmailed can be in your best interest.
6.
Practical Applications of Game Theory
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18.
Games in Motion—Evolutionary Game Theory
Classical game theory relies heavily on the assumption of rationality. This lecture examines an evolutionary perspective, in which successful strategies are "selected for" and propagate through time.
18.
Games in Motion—Evolutionary Game Theory
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7.
A Random Walk—Dealing with Chance Events
Many games include aspects that depend on random chance. Probability theory addresses such uncertainties. Using a simultaneous, two-player game, Professor Stevens shows you how to use probability to define the expected (or average) value of a payoff in an uncertain situation.
7.
A Random Walk—Dealing with Chance Events
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19.
Game Theory and Economics—Oligopolies
You explore how game theory is used in economics—a discipline in which five Nobel Prize winners have been game theorists—by seeing how a monopolist determines optimum production levels and how other competitors affect the situation.
19.
Game Theory and Economics—Oligopolies
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8.
Pure Competition—Constant-Sum Games
Can you escape the second-guessing that arises when each player in a two-person game tries to anticipate the other's choice? You learn how every such game, no matter how apparently hopeless, has at least one Nash equilibrium point.
8.
Pure Competition—Constant-Sum Games
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20.
Voting—Determining the Will of the People
Can game theory evaluate voting systems? You apply what you've learned to several approaches and encounter a theory that no system ranking the candidates can avoid serious problems before you move on to two alternatives that might.
20.
Voting—Determining the Will of the People
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9.
Mixed Strategies and Nonzero-Sum Games
How should we think about mixed strategies? What makes a given strategy "best"? Is there an easy way to determine if a set of strategies is optimal? You explore these questions from a more intuitive perspective and learn how to use the techniques of Lecture 8 in nonzero-sum games.
9.
Mixed Strategies and Nonzero-Sum Games
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21.
Auctions and the Winner's Curse
Auctions play a significant role in our lives, affecting the ownership of radio frequencies, the flow of goods over the Internet, and even the results produced by search engines. This lecture discusses some important categories of auctions and examines which is best for buyer and seller.
21.
Auctions and the Winner's Curse
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10.
Threats, Promises, and Commitments
Can you gain an advantage by moving before, the game begins? Such actions, called "strategic moves," can be both effective and dangerous. You learn the three categories of strategic moves—commitments, threats, and promises—and the essential requirement for their success: credibility.
10.
Threats, Promises, and Commitments
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22.
Bargaining and Cooperative Games
Cooperative games are ones in which players may join in binding agreements. But how do you identify a division of the payoffs that is reasonable and fair? And what mechanisms persuade members of a coalition to accept their allotment?
22.
Bargaining and Cooperative Games
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11.
Credibility, Deterrence, and Compellence
This lecture explains how a player best gains credibility for a threat, promise, or commitment and also explores how these strategic moves are most commonly and advantageously used for deterrence (meant to maintain the status quo) and compellence (meant to change it).
11.
Credibility, Deterrence, and Compellence
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23.
Game Theory and Business—Co-opetition
In the first of two lectures on Brandenberger's and Nalebuff's practical application of game theory to business decision making, you learn how to construct an analytic schematic of key relationships and discuss the impact of both players and the concept of added value.
23.
Game Theory and Business—Co-opetition
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12.
Incomplete and Imperfect Information
What if some events or decisions are known to only one player? This lecture explores such games of asymmetric information and introduces you to a clever means of analyzing such a game.
12.
Incomplete and Imperfect Information
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24.
All the World's a Game
You complete your introduction to co-opetition by adding the concept of rules, tactics, and scope to the plays and added value before examining the materials in a broader context, particularly the relevance of game theory to our daily lives.
24.
All the World's a Game
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24
Lectures
30
minutes/lecture
1.
Individual Diversity and Collective Performance
In this opening lecture, Professor Page shares his intellectual excitement for the topic of diversity as he presents an outline for the course. Explanations of the importance of diversity, the types of diversity you will be covering, and the “big ideas” that motivate the course lay the groundwork for the discussion ahead.
1.
Individual Diversity and Collective Performance
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13.
Digging Holes and Splicing Genes
Delve more deeply into the diversity prediction theorem. Think about its implications for groups and individuals, and how it adds to your understanding of the paradigm-shifting trends related to changes in the nature of work, global demographics, and the proliferation of technology. Conclude with a look at models that inform decisions of hiring and college admissions.
13.
Digging Holes and Splicing Genes
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2.
Why Now? The Rise of Diversity
How do cognitive diversity and identity diversity differ? Where do they intersect? Investigate the key trends that have made diversity such a hot topic and understand why leveraging diversity of thought is necessary to meet today’s challenges.
2.
Why Now? The Rise of Diversity
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14.
Ability and Diversity
Can people be ranked in order of intelligence? Consider IQ tests in light of the course’s toolbox model of intelligence. Then, shift to a tree-of-knowledge-style model to think about with greater subtlety the connections between diversity and ability. Learn how to balance those elements and effectively structure teams for maximum output.
14.
Ability and Diversity
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3.
Diversity Squared
What does the professor really mean when he says “diversity”? Examine the connotations commonly associated with the term and how the notion of diversity is changing. Further your understanding of the connection between cognitive and identity diversity as you begin your exploration of the “diversity bonus.”
3.
Diversity Squared
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15.
Combining and Recombining Heuristics
From the telegraph to the laser, a great deal of innovation stems from taking existing ideas, technologies, and tools and recombining them. Explore how ideas combine and recombine to drive economic growth. Then, probe how society can ensure continued innovation. Do we let people own ideas? Or do we set them free?
15.
Combining and Recombining Heuristics
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4.
The Wisdom of Crowds
How can diverse ways of thinking contribute to a group’s ability to make accurate predictions? Walk through the diversity prediction theorem using clear examples—from guessing the weight of a steer to the height of the tallest building in Rio de Janeiro—to learn why the diversity and talent level of a crowd’s members play equal roles.
4.
The Wisdom of Crowds
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16.
Beware of False Prophets—No Free Lunch
In a rapidly changing, complex world, having a diverse set of tools is imperative. In this lecture, you’ll focus on formal and informal heuristics—procedures that try to improve performance—through a comparison of popular business and self-help books. Then, ponder opposite proverbs and the “no free lunch” theorem to comprehend the conditionality of heuristics.
16.
Beware of False Prophets—No Free Lunch
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5.
The Diversity Prediction Theorem Times Three
Now, turn to another application of forecasting: using knowledge of a population to more appropriately serve it. Analyze the case of the Netflix Prize—where teams competed to outperform the company’s movie-prediction model, Cinematch—to see how putting a diverse “ensemble” of ideas into action proved successful in the real world.
5.
The Diversity Prediction Theorem Times Three
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17.
Crowdsourcing and the Limits of Diversity
Big companies like Microsoft and Pfizer don’t necessarily make their problems and solutions public. Would they be better off if they did? Revisit the Netflix competition and look at other fascinating case studies as you weigh the benefits and limitations of crowdsourcing, the practice of offering up a problem to a population.
17.
Crowdsourcing and the Limits of Diversity
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6.
The Weighting Is the Hardest Part
Determining how much we listen to some people at the expense of others requires careful analysis. Learn strategies for assembling productive teams by zeroing in on the conditions that make assigning unequal weights to certain opinions and predictions desirable.
6.
The Weighting Is the Hardest Part
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18.
Experimentation, Variation, and Six Sigma
How do diversity and variation differ? Analyze how variation can make individual and system-level performance more robust by enabling faster adaptation. Conversely, learn about the six sigma movement toward anti-variation and when variation should be prevented through minimizing experimentation.
18.
Experimentation, Variation, and Six Sigma
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7.
Foxes and Hedgehogs—Can I Be Diverse?
The course of your life depends on a handful of key decisions that are based on making predictions, from where you live to the career you choose. Compare the traits of the “fox,” who knows many things, and the “hedgehog,” who knows one big thing, to see how being a many-model thinker can impact your ability to make more accurate predictions.
7.
Foxes and Hedgehogs—Can I Be Diverse?
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19.
Diversity and Robustness
Before discussing how diversity contributes to system robustness, the professor takes a moment to reiterate the definition of robustness and the differences between variation and diversity. Analyze how portfolio effects, Ashby’s law of requisite variety, and redundancy and overlap support the case for diversity.
19.
Diversity and Robustness
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8.
Fermi’s Barbers—Estimating and Predicting
Hone your predictive skills with a discussion of four models: analogies, Fermi’s method or dimensional analysis, linear decomposition, and trend analysis. Learn which types of phenomena may be predicted—and which cannot—and why in this information age, we need to make estimations and predictions at all.
8.
Fermi’s Barbers—Estimating and Predicting
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20.
Inescapable Benefits of Diversity
Diverse ecologies, cities, and groups often outperform their homogeneous counterparts. Learn why this is often the case, then identify why additional contributions sometimes produce negative results or diminishing returns. Participate in a thought experiment involving diverse ecosystems to drive home the lesson.
20.
Inescapable Benefits of Diversity
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9.
Problem Solving
As you turn your attention to problem solving, trace the ways it differs from prediction and how diverse heuristics—tricks, algorithms, and rules of thumb—can help devise better solutions. In this lecture, you’ll encounter a key insight of the course: A person’s contribution depends on individual talent and diversity relative to the team in equal measure.
9.
Problem Solving
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21.
The Historical Value of Diversity
See how the need for diversity has echoed throughout human history by evaluating how lack of cognitive difference leads to stagnation. You’ll weigh the literal implications of the business adage “adapt or die” through tales of collapsed civilizations, including the Easter Islanders, the Anasazi of the American Southwest, and the Mayans of Central America.
21.
The Historical Value of Diversity
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10.
Diverse Perspectives
Laser technology exists because Einstein saw light in a completely new way. Charge ahead with problem solving by exploring how a new perspective can bring order to complex questions. Analyze how diverse perspectives expand the set of the “adjacent possible,” and play a game of Sum to 15 to see how new perspectives can be transcendent.
10.
Diverse Perspectives
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22.
Homophily, Incentives, and Groupthink
Groups aren’t always productive. In this lecture, the professor cautions against the dangers of groupthink and defines four processes that explain why it occurs: conformity, drift, homophily, and common incentives. Learn strategies to avoid the phenomenon, both as an individual who wants to stand out from the crowd and as an organization.
22.
Homophily, Incentives, and Groupthink
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11.
Heuristics and the Adjacent Possible
Take your study of the “adjacent possible” to the next level by considering how diverse heuristics produce outside-the-box thinking and transcendent perspectives simplify difficult problems. Learn how individuals, organizations, and computers all use heuristics of varying levels of sophistication, and why computers may have an advantage.
11.
Heuristics and the Adjacent Possible
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23.
The Problem of Diverse Preferences
Can disagreement be desirable? Through a more in-depth look at homophily—the propensity to associate with like-minded people—and Arrow’s impossibility theorem, see how preference diversity creates problems and why good outcomes are often conflated with comfort. Discern the key differences between fundamental disagreements vs. instrumental disagreements.
23.
The Problem of Diverse Preferences
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12.
Diversity Trumps Ability
A diverse group can outperform a team of the best talent, provided the problems are hard, the people differ, and the members have germane knowledge. Hear about the experiments that opened the professor’s eyes to diversity’s value in problem solving. Then, learn how the diversity prediction theorem illustrates how differences in perspectives and heuristics enable us to find better solutions.
12.
Diversity Trumps Ability
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24.
The Team. The Team. The Team.
What challenges should you take on? What should your objective function be? In this final lecture, you’ll understand the critical importance of teams sharing a common goal, as well as the case for embracing dissent. You’ll revisit preference diversity to pinpoint conditions in which it can hinder progress or help prevent collapse.
24.
The Team. The Team. The Team.
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