Lecture 10 - Mixed Strategies in Baseball, Dating and Paying Your Taxes

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.