lecture2 notes

11 game theory lecture 2 strategic form games finite

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: is important. But in strategic form games, there is no difference between an action and a pure strategy, and we will use them interchangeably. 11 Game Theory: Lecture 2 Strategic Form Games Finite Strategy Spaces When the Si is finite for all i , we call the game a finite game. For 2 players and small number of actions, a game can be represented in matrix form. Recall that the cell indexed by row x and column y contains a pair, (a, b ) where a = u1 (x , y ) and b = u2 (x , y ). Example: Matching Pennies. Player 1 \ Player 2 heads tails heads (−1, 1) (1, −1) tails (1, −1) (−1, 1) This game represents pure conflict in the sense that one player’s utility is the negative of the utility of the other player. Thus zero sum game. More generally true for strictly competitive games, that is, games in which whenever one player wins the other one loses, though the sum of the payoffs need not be equal to 0. 12 Game Theory: Lecture 2 Strategic Form Games Infinite Strategy Spaces Example: Cournot competition. Two firms producing a homogeneous good for the same market. The action of a player i is a quantity, si ∈ [0, ∞] (amount of good he produces). The utility for each player is its total revenue...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online