October 22 Lecture - A game is a strategic interaction where there are 2 participants called players where every players outcome depends on the actions

# October 22 Lecture - A game is a strategic interaction...

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October 22, 2012 A game is a strategic interaction where there are 2+ participants called players where every player’s outcome depends on the actions of other players (interdependent payoff) Theory of games: developed by von Neumann and Morgenstern after playing poker Could there be a theory of poker? Question that helped generate the theory of games Basic notions of strategy (choice made) and payoff (results of players’ choice taking into account that of others as well) Assume that for every possible result, we can assign a numerical score to a player where a higher number is a better result Can have simultaneous move game (each player moves, then we find outcome) Could be made into a probability tree if there are random choices being made In general, there isn’t a dominant strategy but if there is one, play it-makes Prisoner’s Dilemma interesting Basic understanding is that all options of all players is common knowledge Vicarious problem solving: if player were opposite player, what would they choose?

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• Fall '11
• Kleiman
• Game Theory, player, Nash, Dominant strategy, von neumann

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