978-0393919684 Chapter 14 Lecture Note

subject Type Homework Help
subject Pages 2
subject Words 457
subject Authors Avinash K. Dixit, David H. Reiley Jr., Susan Skeath

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PART FOUR—Application to Specific Strategic Situations
CHAPTER 14
Brinkmanship: The Cuban Missile Crisis
Teaching Suggestions
If you are going to use the Cuban missile crisis case presented in the text as your
teaching vehicle for brinkmanship, we urge you to prepare students by screening the movie
Thirteen Days in the previous class, or at least by making a copy of it available in your
college’s or university’s audiovisual library. If a substantial proportion of your class consists of
political science (especially international relations) students, this will be an attractive topic in
its own right. You can then ask these students to do some advance reading, and lead a
discussion of the case in class. Several books are cited in footnote 2 on page 561 of the text; of
these, The Kennedy Tapes is the most dramatic and engaging, while Essence of Decision is the
most academic and analytical (even though, as argued in the text, and in greater detail in Dixit
and Nalebuff, Thinking Strategically, the analysis suffers from its limited perspective of game
theory as concerned with two-person games). For a variation on the missile crisis example and
an opportunity to discuss the importance of assumptions about the magnitude of player payoffs,
you may want to use the missile crisis payoff structure described in Exercise U1.
If your class is really mathematically sophisticated, you can develop more general
models of “wars of attrition,” which the simplified model presented in the text attempts to
capture in a crude way. This type of analysis will also prepare such a class for more formal
models of bidding when you come to the auctions chapter. Theoretical analyses and other
applications of this class of models include:
Christopher Bliss and Barry Nalebuff, “Dragon-Slaying and Ballroom-Dancing: The Private
Supply of a Public Good,” Journal of Public Economics, vol. 25, no. 1 (1984), pp. 1–12.
Games of Strategy, Fourth Edition Copyright © 2015 W. W. Norton & Company
Jeremy Bulow and Paul Klemperer, “The Generalized War of Attrition,” American Economic
Review, vol. 89, no. 1 (March 1999), pp. 175–189. (You may find footnote 11 on p. 177
useful for playing and discussing a game in class.)
Jack Hirshleifer and John G. Riley, The Analytics of Uncertainty and Information
(Cambridge, UK: Cambridge University Press, 1992), pp. 342–343, 384–386.
Carolyn Pitchik, “Equilibria of a Two-person Non-Zero-Sum Noisy Game of Timing,”
International Journal of Game Theory, vol. 10, nos. 3–4 (1982), pp. 207–221.
More generally, brinkmanship is a good topic for lively discussions. You can ask the
students if they have observed or participated in other situations involving brinkmanship. These
situations can be among family, friends, or rivals or on committees in school or a university.
The idea of brinkmanship as “chicken in real time” can be vividly developed and reinforced
using such examples.
Games of Strategy, Fourth Edition Copyright © 2015 W. W. Norton & Company

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