Chapter 10 Game Theory
Principle: Play your dominant strategy
Check to see if you have a dominant strategy. If you have one, play it!
sequential-move game
Game in which one player makes a move after observing the other player's move.
Nash equilibrium
A condition describing a set of strategies in which no player can improve her payoff by unilaterally changing her own strategy, given the other players' strategies; a situation where every player is doing the best he or she can given what other players are doing
normal-form game
A representation of a game indicating the players, their possible strategies, and the payoffs resulting from alternative strategies.
Secure strategy
A strategy that guarantees the highest payoff given the worst possible scenario. A situation where the player does NOT lose It does NOT take into account the decisions of your rival and may prevent you from earning a higher payoff
trigger strategy
A strategy that is contingent on the past play of a game and in which some particular past action "triggers" a different action by a player.
dominant strategy
A strategy that results in the highest payoff to a player regardless of the opponent's action.
mixed (randomized) strategy
A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his or her action.
Principle: Sustaining Cooperative Outcomes with Trigger Strategies
Cooperate provided no player has ever cheated in the past. If any player cheats, 'punish' the player by choosing the one-shot Nash Equilibrium strategy forever after
simultaneous-move game
Game in which each player makes decisions without knowledge of the other players' decisions.
Principle: Put yourself in your rival's shoes
If you do not have a dominant strategy, look at the game from your rival's perspective. `if your rival has a dominant strategy, anticipate that he or she will play it
What should a player do in the absence of a dominant strategy?
Play a secure strategy