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Unformatted text preview: o Idea that people are conditioning their behavior on how other people are going to behave. 6. Two major types of games o Static/normal form game • 2 X2 MATRIX example in lecture simultaneous player actions. • Derive strategy from. Solve for some form of strategy. • Equilibrium concept, give stratefy that neither wants to deviate from, Nash equilibrium. A set of strategy where each player is playing the best response to the other player's strategy . • Choice choosen to maximize own payoff given if the other;'s strategy were to stay the same. • There is always one, if not more Nash Equilibrium. • Battle of the Sexes, two possible equilibrium, coordination game. o Dynamic/ Extensive form game. • Adds the element of time....
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- Spring '08
- Game Theory, 50 %, simultaneous player actions, X2 MATRIX example, Static/normal form game, Dynamic/ Extensive form