Lecture 8 - Nash Equilibrium: Location, Segregation and Randomization

We first complete our discussion of the candidate-voter model
showing, in particular, that, in equilibrium, two candidates cannot
be too far apart. Then we play and analyze Schelling’s location
game. We discuss how segregation can occur in society even if no
one desires it. We also learn that seemingly irrelevant details of
a model can matter. We consider randomizations first by a central
authority (such as in a bussing policy), and then decentralized
randomization by the individuals themselves, “mixed strategies.”
Finally, we look at rock, paper, scissors to see an example of a
mixed-strategy equilibrium to a game.