Index

Module 02 · Game TheoryMoves in Time

Who Gets the Bigger Slice

Coordination Schelling Points and Credible Threats
Coordination Schelling Points and Credible Threats · Open board

The board is about commitments and threats that the other side has to take seriously. Bargaining is where those are used most often: every “final offer” is a threat to walk away, and this lesson works out which ones are believed.

Before you start. From Draw the Tree, Start From the End you have backward induction: draw who moves when, then settle the last choice first and step back. From Coordination, Schelling Points & Credible Threats you have the credible threat: a threat counts only if carrying it out is really your best move when the moment comes. Here two people split something, and each round of arguing costs them both.

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Lab

The incumbent swears it will start a price war if you enter. When should you believe it?

Drag What a price war costs the incumbent from 6 down to 1, and watch The fork after entry.

Open The empty threat →

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