Summary Background Information Lecture 3

Summary Background Information Lecture 3 - Summary of...

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Summary of Background Information Lecture 3 1. Basic elements of a game: the players, the strategies available to each player and the payoffs each player receives for each possible combination of strategies 2. Payoff matrix: a table that describes the payoffs in a game for each possible combination of strategies 3. Dominant strategy: one that yields a higher payoff no matter what the other players in a game choose 4. Dominated strategy: a strategy available to a player that yields a lower payoff than some other strategy 5. Nash equilibrium: any combination of strategies in which each player’s strategy is his or her best choice, given the other player’s strategies 6. Prisoner’s dilemma: a game in which each player has a dominant strategy and, when each plays it, the resulting payoffs are smaller for each than if each had played a dominated strategy 7. Repeated prisoner’s dilemma: a standard prisoner’s dilemma that confronts the same players repeatedly 8. Tit-for-tat:
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  • Spring '14
  • Game Theory, prisoner’s dilemma, oligopolistic industries, 10. Two basic models for firms in

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