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Unformatted text preview: Lecture ??: 04/23/2007 Recall: General comments / criticisms about classical game theory. 1. Requires hyper-rational players (over the years, people have t ried a variety of approaches to bounded probability . 2. Games can have multiple Nash equilibriahow to pick one (or a few) as solution to the game? Approach has been to refuse equilibriaidentifying sketchy ones and throwing those out. Huge industry in game theoryjust one example (of many)R. Sellens trembling hand perfect equilibrium. Saw in this example: N Y P (2,0) (1,1) M (2,0) (-1,-1) Claim : (M,N) is sketchy if column player were to play a mixed strategy (1- )N+ Y where is small-then M is no longer a best reply for Player 1. This equilibrium (ie. (M, N)) fails Selters criterionnot trembling-hand perfect. Other refinements: Proper equilibria (subset of tremblind hand perfect) (Myerism) In dynamic games (eg. repeated or extensive-form games) have sequential equilibria and subgame-perfect equilibria. 3. Learning how to play is not built in to classical game theory (cf. Nashs thesis quote about populationstatonnment process, etc.) Especially relevant for large games, wehre players need to learn not only how to play but...
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