Repeated Games - UCSB Economics
... Selten noted that while the induction argument is the logically correct, gametheoretic solution assuming rationality and common knowledge of the structure of the game, it does not seem empirically plausible – why? Under the enter/accommodate equilibrium, the incumbent earns a payoff of 2x20 =40. But ...
... Selten noted that while the induction argument is the logically correct, gametheoretic solution assuming rationality and common knowledge of the structure of the game, it does not seem empirically plausible – why? Under the enter/accommodate equilibrium, the incumbent earns a payoff of 2x20 =40. But ...
THE APPLICATION OF THE GAME THEORY TO THE
... analyzing and understanding different strategies. It attempts to address the functional relationship between the selected strategies of individual players and their market outcome, which may be either profit or loss. A game is any situation in which players, i.e. participants in the game, make strat ...
... analyzing and understanding different strategies. It attempts to address the functional relationship between the selected strategies of individual players and their market outcome, which may be either profit or loss. A game is any situation in which players, i.e. participants in the game, make strat ...
The Evolution of Cooperative Behavoir
... SNEAKER: The player starts with a C and then plays whatever its partner play in the previous move. However, at random intervals it plays D. TIT FOR TAT: The player starts playing C and then plays whatever its partner did in the previous move. TIT FOR TWO TATS: The player plays C in the first and sec ...
... SNEAKER: The player starts with a C and then plays whatever its partner play in the previous move. However, at random intervals it plays D. TIT FOR TAT: The player starts playing C and then plays whatever its partner did in the previous move. TIT FOR TWO TATS: The player plays C in the first and sec ...
Lecture 8 (More on mixed strategies
... Two-person constant sum game • Sometimes called zero-sum game. • The sum of the players’ payoffs is the same, no matter what pair of actions they take. • In a two-person constant sum game, one player’s gain is the other’s loss. ...
... Two-person constant sum game • Sometimes called zero-sum game. • The sum of the players’ payoffs is the same, no matter what pair of actions they take. • In a two-person constant sum game, one player’s gain is the other’s loss. ...
Lecture_06.4 Oligoplies and Game Theory
... Theory: the Kinked-Demand Curve • Above the kink, demand is relatively elastic because all other firm’s prices remain unchanged. Below the kink, demand is relatively inelastic because all other firms will introduce a similar price cut, eventually leading to a price war. Therefore, the best option fo ...
... Theory: the Kinked-Demand Curve • Above the kink, demand is relatively elastic because all other firm’s prices remain unchanged. Below the kink, demand is relatively inelastic because all other firms will introduce a similar price cut, eventually leading to a price war. Therefore, the best option fo ...
Review Questions Part 3 (Chapters 10-12, 14)
... 12.1 Which properties define an oligopolistic market? Why does it make sense to use game theory to study oligopolistic markets? 12.2 Suppose two firms (or countries as in our world oil market example) operate in a market. If they collude: Which quantity would they want to jointly provide and which p ...
... 12.1 Which properties define an oligopolistic market? Why does it make sense to use game theory to study oligopolistic markets? 12.2 Suppose two firms (or countries as in our world oil market example) operate in a market. If they collude: Which quantity would they want to jointly provide and which p ...
TIME AVERAGE REPLICATOR AND BEST REPLY
... 5.1 the limit is a singleton invariant set of the (BRD), and hence a Nash equilibrium. As a consequence one obtains: If an interior orbit of the replicator dynamics converges then the limit is a Nash equilibrium. (For a direct proof see [15, Theorem 7.2.1].) For 2 person zero-sum games, the global a ...
... 5.1 the limit is a singleton invariant set of the (BRD), and hence a Nash equilibrium. As a consequence one obtains: If an interior orbit of the replicator dynamics converges then the limit is a Nash equilibrium. (For a direct proof see [15, Theorem 7.2.1].) For 2 person zero-sum games, the global a ...
Salop Model of Product Differentiation Consumers are located
... So far, we have assumed that players’ randomisations (when they play mixed strategies) are independent. In the 2×2 coordination games considered earlier, for instance, we can describe the mixed strategy equilibrium as follows: ...
... So far, we have assumed that players’ randomisations (when they play mixed strategies) are independent. In the 2×2 coordination games considered earlier, for instance, we can describe the mixed strategy equilibrium as follows: ...
Dardi on game theory
... Recall the premise of the conditional statement underlying individual stability (slide 9): “if the others have no reason to refuse to do their part in this profile, I have no reason either”. Doing my part is rational if the premise is true. But why should I believe it to be true? A moment’s reflect ...
... Recall the premise of the conditional statement underlying individual stability (slide 9): “if the others have no reason to refuse to do their part in this profile, I have no reason either”. Doing my part is rational if the premise is true. But why should I believe it to be true? A moment’s reflect ...
game theory.
... • Economists use game theory to study firms’ behavior when their payoffs are interdependent. • The game can be represented with a payoff matrix. Depending on the payoffs, a player may or may not have a dominant strategy. ...
... • Economists use game theory to study firms’ behavior when their payoffs are interdependent. • The game can be represented with a payoff matrix. Depending on the payoffs, a player may or may not have a dominant strategy. ...
Note
... We can identify each strategy si ∈ Si with the mixed strategy that puts ‘all the weight’ on the strategy si . In this context si will be called a pure strategy . Consequently we can view Si as a subset of ∆Si and S−i as a subset of ×j6=i ∆Sj . By a mixed extension of (S1 , . . . , Sn , p1 , . . . , ...
... We can identify each strategy si ∈ Si with the mixed strategy that puts ‘all the weight’ on the strategy si . In this context si will be called a pure strategy . Consequently we can view Si as a subset of ∆Si and S−i as a subset of ×j6=i ∆Sj . By a mixed extension of (S1 , . . . , Sn , p1 , . . . , ...
Game Theory and the Cuban Missile Crisis
... Classical Game Theory and the Missile Crisis Game theory is a branch of mathematics concerned with decision-making in social interactions. It applies to situations (games) where there are two or more people (called players) each attempting to choose between two more more ways of acting (called strat ...
... Classical Game Theory and the Missile Crisis Game theory is a branch of mathematics concerned with decision-making in social interactions. It applies to situations (games) where there are two or more people (called players) each attempting to choose between two more more ways of acting (called strat ...
Game theory and the Cuban missile crisis
... These strategies can be thought of as alternative courses of action that the two sides, or "players" in the parlance of game theory, can choose. They lead to four possible outcomes, which the players are assumed to rank as follows: 4=best; 3=next best; 2=next worst; and l=worst. Thus, the higher the ...
... These strategies can be thought of as alternative courses of action that the two sides, or "players" in the parlance of game theory, can choose. They lead to four possible outcomes, which the players are assumed to rank as follows: 4=best; 3=next best; 2=next worst; and l=worst. Thus, the higher the ...
Section 11 - Harvard University
... In this example crazy at first is not strictly dominated for the column player because if row player also plays crazy he gets the highest payoff by choosing crazy. But the common knowledge of rationality ensures that the column player realizes row player will never play crazy as it is a strictly dom ...
... In this example crazy at first is not strictly dominated for the column player because if row player also plays crazy he gets the highest payoff by choosing crazy. But the common knowledge of rationality ensures that the column player realizes row player will never play crazy as it is a strictly dom ...
Evolutionary game theory
Evolutionary game theory (EGT) is the application of game theory to evolving populations of lifeforms in biology. EGT is useful in this context by defining a framework of contests, strategies, and analytics into which Darwinian competition can be modelled. EGT originated in 1973 with John Maynard Smith and George R. Price's formalisation of the way in which such contests can be analysed as ""strategies"" and the mathematical criteria that can be used to predict the resulting prevalence of such competing strategies.Evolutionary game theory differs from classical game theory by focusing more on the dynamics of strategy change as influenced not solely by the quality of the various competing strategies, but by the effect of the frequency with which those various competing strategies are found in the population.Evolutionary game theory has proven itself to be invaluable in helping to explain many complex and challenging aspects of biology. It has been particularly helpful in establishing the basis of altruistic behaviours within the context of Darwinian process. Despite its origin and original purpose, evolutionary game theory has become of increasing interest to economists, sociologists, anthropologists, and philosophers.