a) a player moves his action is observed by the other player who then moves and his action is observed by the other player and so on, until the game finishes.
b) - removing sticks
- game played with myself (alarm clock)
- incrumbent and challenger (price fight or not?)
How do we usually solve a game with perfect information?
⇒ Games of perfect information are typically solved backwards starting at the end, and are very important to understand credibility of threats and commitment.
Describe a normal form game.
normal form is a description of a game. Unlike extensive form, normal-form representations are not graphical per se, but rather represent the game by way of a matrix. While this approach can be of greater use in identifying strictly dominated strategies and Nash equilibria, some information is lost as compared to extensive-form representations
Describe an equilibrum in a normal form game.
You have played an equilibrium if your choice was a best reply to the other player’s choice and this is also true for the other player, namely her/his choice is a best reply to yours. In an equilibrium you cannot gain anything by choosing another strategy under the assumption that the other player does not change hers/his.
a) describe a simultaneous move game
b) and give some examples
a) simultaneous games are typically represented by the normal form; a game where both players have to decide/move simultaneously
b) prisoner's dilemma
decision or game:
a) a pair of teenage girls choosing dresses for their prom
b) a group of grocery shoppers in the diary section with each shopper choosing flavor of yogurt to purchase
a) game - girls choice affects the others choice
b) decision - no interaction among players
decision or game:
a) a college student considering what type of postgraduate education to pursue
b) the new york times and the wall street journal choosing prices for their online subscriptions this year
a) decision - doesn't affect other people
b) game - (Betrand; price competition; strategic)
What kind of decision theory is game theory?
Game theory is interactive decision theory
(It studies the behavior of players whoce decisions affect each other)