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Flashcards in Game Theory Deck (5)
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1

Game

• A game is a formal representation of a situation in which a number of individuals interact in a setting of strategic interdependence

2

• Elements of a game

o Players: who are involved?
o Rules: who moves when? What do they know? What can they do?
o Outcomes: for each possible set of actions by the players, what is the outcome of the game?
o Payoffs: what are the players’ preferences over the possible outcomes?

3

o Games of Perfect and Imperfect Information

o Games of Perfect and Imperfect Information: Whether the player knows the actions previously taken by the opponent or not

4

o Games of Complete and Incomplete Information:

o Games of Complete and Incomplete Information: Whether the player has complete information about his/her opponent’s type or not.

5

Strategy

• A strategy is a complete contingent plan, that specifies how the player will act in every possible circumstance in which she/ he might be called upon to move (i.e., in each of her/his information sets).