Nash equilibrium = a pair of strategies (strategy is a best response against the other)
When players act rationally, optimally, and in their own self-interest, it’s possible to compute the likely outcomes (equilibria) of G.
By studying G, we learn: Strategies are likely to take us and how to modify the rules of the game to our own advantage.
SEQUENTIAL G (players take turns moving) are influenced by who moves first (a potential first-mover advantage, or disadvantage), and who can commit to a future course of action.
Credible commitments (threats) are difficult to make because they require players to commit to a course of action against their self-interest. Thus, the best threat is one you never have to use.
SIMULTANEOUS-move G, players move at the same time.
In the prisoners’ dilemma, convict and cooperation are in tension—self-interest leads to outcomes that reduce both players’ payoffs. Cooperation can improve both players’ payoffs.
Rules of thumb:
• Be nice: No rest strikes.
• Be easily provoked: Respond immediately to rivals.
• Be forgiving: Don’t try to punish competitors too much.
• Don’t be envious: Focus on your own slice of the port pie, not on your competitor’s.
• Be clear: Make sure your competitors can easily interpret your actions.

Strategic: model as either a simultaneous-move or sequential-move game. Focusing on how the outcome of bargaining games depends on who moves first and who can commit to a bargaining position, as well as whether the other player can make a counteroffer.
A player can gain bigger share of the \“pie” by 1) changing a simultaneous-move game into a sequential- move game with a first-mover advantage; or by 2) committing to a position.
Non-strategic focuses on the gains and alternatives to agreement to determine the outcome of bargaining.
• Main insight: The gains from agreement relative to the