Game Theory VL

(belongs to "extensive form games")

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

   - chess

  - game played with myself (alarm clock)

  - incrumbent and challenger (price fight or not?)

⇒ Games of perfect information are typically solved backwards starting at the end, and are very important to understand credibility of threats and commitment. 

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

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) simultaneous games are typically represented by the normal form; a game where both players have to decide/move simultaneously

b) prisoner's dilemma 

a) game - girls choice affects the others choice

b) decision - no interaction among players

a) decision - doesn't affect other people

b) game - (Betrand; price competition; strategic)

Game theory is interactive decision theory

(It studies the behavior of players whoce decisions affect each other)