Cooperation and Competition
1.1: False. This describes Nash Equilibrium outcomes.
1.2: True. In a constant sum game, one players gain is another players loss.
1.3: True. Assuming there is at least one Nash Equilibriu
A probabilistic mix of a players pure strategies.
The probabilities assigned to her pure strategies must sum to 1.
Games in which there are no NE in pure strategies are usually zero sum.
exercises and tuts week 4
Duncan Veitch tut 33 Febin Korula
Read ch 20 and answer the following questions (you may also find it useful to go online)
1) What is Says Law? (3)
Says law is an economic rule that says production is the source of demand. This r
Sequential Move Games: Basic Introduction
Sequential Move Games:
Differs from simultaneous games as you are aware of the other players strategy choice when
having to choose your strategy.
Represented in extensive form or a tree
Week 1 Summary
Decisions vs. Games:
When People or Players deal with others, there must be some cross effect of their actions; what one
player does must affect the outcome or welfare of the other.
A strategic game is defined by the players bein
Week 4 Summaries
General Form Games:
In an assurance game there are 2 NE.
These occur where both players are playing the same
One strategy is always preferred over the other
So how do we get to these equilibria?
o Cell cfw_A,a
When P2 is playi
exercises and tuts week 9
Read chapter ch 22 and answer the following questions:
1) Simple quantity theory normally suggests that V is relatively constant in the short run.
However, the great American economist, Milton Friedman, once said,
When the quanti
- Bargaining is characterised by 2 properties:
Parties will coordinate their actions if they believe they can create surplus welfare
Parties dont have identical utility functions over the surplus
- Merely solving for NE of bargaining games isnt v helpfu
Analysing different Game Forms
A game is one of complete information if all factors of the game are common knowledge. Thus, each
player is aware of all other players, the timing of the game, and the set of
Week 2 Summaries
SIMULTANEOUS-MOVE GAMES WITH PURE STRATEGIES (DISCRETE)
Simultaneous move (circularity of thought)
Pure strategies (no randomising/mixed strategies)
Discrete (finite amount of strategies available)
Remember, in a one shot
ECO2007S: Week 6
Changing the Structure:
Changing sequential-play to simultaneous requires players to no longer be able to observe their
opponents choices. Thus creating a simultaneous game due to imperfect information
The way that simultaneous moves are
A probabilistic mix of a players pure strategy.
o Probabilities must sum to 1
Problem comes in a game where one player has something to lose (zero sum game), should
the other player find out which strategy they will play and so t
COLLECTIVE ACTION GAMES GRAPHICAL REPRESENTATIONS
1. What is a collective action game?
A collective action game can be simply thought of as a game where a group of people
(or a community) have the choice of participating or not participating in an attempt
Week 3 Summary
If there is an outcome A that is at least as good for every agent as another outcome B, and some
agent strictly prefers A to B then A pareto dominates B. An outcome is pareto optimal if there is not
Week 9: Strategic Moves
Change the rules of the original game to create a new two-stage game
Stage 1 specifies how you will act in stage 2
Different 1st stage actions correspond to different strategic moves
3 Types of Strategic Moves
Two Stage Game:
Two retail giants in South Africa, Woolworths and Truworths are deciding if
they should invest in a new software to provide a quicker, safer and more
accessible medium for their consumers to shop online.
If neither invest, the games ends.
Cooperation and Competition
Tutorial 10, Daniel Sive
July 22nd, 2013
1.1: This is a decision. When making a decision (as opposed to playing a game), the
player can choose among a set of actions without concern for response or in
1.1: In an assurance game, the players have both the same preferred (coordinated)
strategies and the same preferred (coordinated) outcomes. There are two Nash equilibria
and the pareto optimal outcome is also preferred by both players.
a. b(n) is increasing
b. c(n) is increasing
c. p(n) is decreasing
d. s(n) is increasing
1.4: This is a chicken game. Equilibrium occurs at the intersection o
1.1: For player 1: 4>0, 2>-1, and 4>2 so D>B (D strictly dominates B) and 2>-1, 4>2,
and 0>-1 so A>C (A strictly dominated C). Player 2 does not have any strictly dominated
strategies at the outset of the game, but 2=2, 4>0, 0=0, and 2>-1 so bc (b weakly
Game Theory Study Guide
Games are RATIONAL (involve rational players (have preferences that they are
aware of, act in a way to reflect preferences) and INTERACTIVE (whats optimal
depends on what others do)
Type of optimization
o Parametric param
Week 9: Uncertainty and Information
Asymmetric Information: some aspects of the game are known to some players
but not common knowledge among all players
o Eg: structures of contracts, markets for labour, organization of companies
o A strategy in itself: