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Flashcards in Game Theory and Auctions Deck (14):
1

Game Theory

Tool Kit - Strategic Decision Making

2

Non-Cooperative Game Theory

Studies adapted strategies of decision making in non-cooperative situations

3

Non-Cooperative Game Scenarios

Simultaneous or sequential decisions, Complete or Incomplete Information

4

What is a "Game?"

Mathematical representation of a strategic interaction with three parts: N- Agents, S-Strategies, P- Payoff to equal as Solutions

5

Solution of the Game

Equilibrium as a set of strategies predicts Players Behavior

6

Strategy

Given the actions players can take in the game (go left or right), a strategy is a full contingent plan that describes the player's action at any given point in the game.

7

Payoffs

What people will obtain from the game

8

Strategic Form Games

Players move simultaneously or, if sequentially, players cannot observe the other players' moves.
Equilibrium concepts:
1. Equilibrium in dominant strategies
2. Nash Equilibrium

9

Extensive Form Games

Players move sequentially
Equilibrium Concept:
Subgame-perfect Nash Equilibrium (look ahead and reason back)

10

Analyze Strategic Form Games

Use Payoff Matrices

11

Dominant Strategy

A strategy that a player would want to follow regardless of the other player's behavior

12

Dominated Strategy

A strategy that a player would not want ot follow regardless of the other player's behavior.

13

Best Response

A best response is one player's best answer to an anticipated move by the other player

14

Nash Equilibrium

An outcome from which neither player would want to deviate, taking the other player's behavior as given.
Strategies are mutually best responses to each other.
A set of strategies in which each player i's strategy si is the best response to the strategies specified for everyone else.