Download presentation

Presentation is loading. Please wait.

Published byTavion Love Modified over 3 years ago

1
Game Theory

3
O A B C $5 $1 $3 $2 $4 -$3 $0 $1 White plays first Then Black White’s move is not disclosed until After Black chooses x y z

5
Prisoners’ Dilemma Two crooks questioned by police for a serious crime. Separate cells, no communication. If neither confesses then you a 2 year sentence for each is all you have on the lesser charge. Turn state witness, confess and you will be set free! * The other gets 4 years plus 1 more for obstructing justice. (But if both of you confess you both get 4 yrs).

6
Keep Quiet (Q) or Squeal (S) Payoffs are in years lost in jail Payoffs (P1, P2); prisoners 1 and 2 Q -2, -2 -5, 0 S 0, -5 -4, -4 Q S Prisoner 2 Prisoner 1 J. Webb, “Game Theory”, Springer.

7
Both prisoners, by following the optimum strategy (self interest) are actually worse off! Honor among thieves? Revenge! (that’s another game, with a different set of payoffs!) J. Webb, “Game Theory”, Springer.

8
Two firms are merging into two divisions of a large firm, and have to choose the computer system to use. In the past the firms have used different systems, I and A; each prefers the system it has used in the past. They will both be better off if they use the same system then if they continue to use different systems. http://www.economics.utoronto.ca/osborne/2x3/t utorial/NEFEX.HTM

9
(I,I) Neither player can increase her payoff by choosing an action different from her current one. Thus this action profile is a Nash equilibrium. (I,A) By choosing A rather than I, player 1 obtains a payoff of 1 rather than 0, given player 2's action. Thus this action profile is not a Nash equilibrium. [Also, player 2 can increase her payoff by choosing I rather than A.] (A,I) By choosing I rather than A, player 1 obtains a payoff of 2 rather than 0, given player 2's action. Thus this action profile is not a Nash equilibrium. [Also, player 2 can increase her payoff by choosing A rather than I.] (A,A) Neither player can increase her payoff by choosing an action different from her current one. Thus this action profile is a Nash equilibrium. We conclude that the game has two Nash equilibria, (I,I) and (A,A).

10
Game Theory and Decisions How are societies formed and sustained? The Social Contract largely unoptimal equilibrium Collective of individual decisions optimizing payoff Taxes: – Most would want to do without it (wealthier without it) – If no one pays, then no services, everyone worse off – Equilibrium condition is still unsatisfying

11
http://www.wired.com/wiredscience/2012/04/probability-and- game-theory-in-the-hunger-games/ In Puccini’s opera, the woman Tosca’s lover is condemned to death. Scarpia, the police chief offers to fake the execution in exchange for Tosca’s honor. The deal is made. However, Tosca stabs and kills Scarpia to keep her virute. Scarpia however, had reneged on the deal and actually had Tosca’s lover executed.

13
Fishing Two Nations Combined sustainable fish catch proportional to your fleet size and your competitor’s fleet size Nash equilibrium

14
From James Case, “Competition,” Hill and Wang

Similar presentations

OK

1 Section 2d Game theory Game theory is a way of thinking about situations where there is interaction between individuals or institutions. The parties.

1 Section 2d Game theory Game theory is a way of thinking about situations where there is interaction between individuals or institutions. The parties.

© 2018 SlidePlayer.com Inc.

All rights reserved.

Ads by Google

Ppt on marie curie's husband Ppt on asymptotic notation of algorithms pdf Ppt on diode transistor logic gates Ovary anatomy and physiology ppt on cells Ppt on cells and batteries Ppt on earthquake in japan 2011 Ppt on global warming a need for change English 8 unit 12 read ppt online Marketing mix ppt on airtel Ppt on division for class 2