Flashcards in Game Theory and Auctions Deck (14):
Tool Kit - Strategic Decision Making
Non-Cooperative Game Theory
Studies adapted strategies of decision making in non-cooperative situations
Non-Cooperative Game Scenarios
Simultaneous or sequential decisions, Complete or Incomplete Information
What is a "Game?"
Mathematical representation of a strategic interaction with three parts: N- Agents, S-Strategies, P- Payoff to equal as Solutions
Solution of the Game
Equilibrium as a set of strategies predicts Players Behavior
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.
What people will obtain from the game
Strategic Form Games
Players move simultaneously or, if sequentially, players cannot observe the other players' moves.
1. Equilibrium in dominant strategies
2. Nash Equilibrium
Extensive Form Games
Players move sequentially
Subgame-perfect Nash Equilibrium (look ahead and reason back)
Analyze Strategic Form Games
Use Payoff Matrices
A strategy that a player would want to follow regardless of the other player's behavior
A strategy that a player would not want ot follow regardless of the other player's behavior.
A best response is one player's best answer to an anticipated move by the other player