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I 6 game theory lecture 2 introduction decision making

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Unformatted text preview: a = 1), then U (a ) = ∑ pia u (ci ) . i 6 Game Theory: Lecture 2 Introduction Decision-Making under Uncertainty (continued) Given expected utility theory and our postulate of “rationality,” single person decision problems are (at least conceptually) simple. If there are two actions, a and b , inducing probability distributions F a (c ) and F b (c ), then the individual chooses a over b only if U (a ) = � u (c ) dF a (c ) ≥ U (b ) = � u (c ) dF b (c ) . 7 Game Theory: Lecture 2 Introduction From Single Person to Multiperson Decision Problems But in a multi-agent situation, the utility of an agent or probability distribution over outcomes depends on actions of others. A simple game of “partnership” represented as a matrix game: Player 1 \ Player 2 work hard shirk work hard (−1, 1) (2, 2) shirk (1, −1) (0, 0) Here the first number is the payoff to player (partner) 1 and the second number is the payoff to player 2. More formally, the cell indexed by row x and column y cont...
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This document was uploaded on 03/19/2014 for the course EECS 6.254 at MIT.

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