Social Interactions and Incentives I

Materials for class on Friday, January 26, 2018

Contents

Slides

Download the slides from today’s lecture.

Additional references to things brought up in class

• Cape Town about to run out of water
• Nutella riots
• Benefits of a universal basic income
• “The impact of basic income on the propensity to work: Theoretical issues and micro-econometric results”

Parable of the polygons

Play through the Parable of the Polygons for more details about how rational individual choices can lead to suboptimal social outcomes.

Helpful game theory resources

There are hundreds of examples and tutorials of how to solve game theoretic problems online. Here are some of the best:

• Battle of the Sexes and mixed strategies
• Prisoner’s Dilemma and payoffs
• Chicken

Feedback for today

Go to this form and answer these three questions (anonymously if you want):

1. What new thing did you learn today?
2. What was the most unclear thing about today’s class?
3. What was the most exciting thing you learned today?