Does any player have a dominated strategy?
If there is a dominated strategy, eliminate it.
If there is no dominant or dominated strategy, the game is unsolved by dominance. We need to look at other solution concepts like Nash equilibrium.
3.3 Game TheoryGame theory is a branch of applied mathematics, w.docxgilbertkpeters11344
3.3 Game Theory
Game theory is a branch of applied mathematics, which deals with multi-person decision making situations. The basic assumption is that the decision makers pursue some well-defined objectives and take into account their knowledge or expectations of the other decision makers’ behavior. Many applications of game theory are related to economics, but it has been applied to numerous fields ranging from law enforcement [19] to voting decisions in European Union [20].
There are two main ways to capitalize game theory. It can be used to analyze existing systems or it can be used as a tool when designing new systems. Existing systems can be modeled as games. The models can be used to study the properties of the systems. For example, it is possible to analyze the effect of different kind of users on the system. The other approach is implementation theory, which is used when designing a new system. Instead of fixing a game and analyzing its outcome, the desired outcome is fixed and a game ending in that outcome is looked for. When a suitable game is discovered, a system fulfilling the properties of the game can be implemented.
Most game theoretical ideas can be presented without mathematics; hence we give only some formal definitions. Also, introduce one classical game, the prisoner’s dilemma which we use to demonstrate the concepts of game theory.
3.3.1 Prisoner’s Dilemma
In the prisoner’s dilemma, two criminals are arrested and charged with a crime. The police do not have enough evidence to convict the suspects, unless at least one confesses. The criminals are in separate cells, thus they are not able to communicate during the process. If neither confesses, they will be convicted of a minor crime and sentenced for one month. The police offer both the criminals a deal. If one confesses and the other does not, the confessing one will be released and the other will be sentenced for 9 months. If both confess, both will be sentenced for six months. The possible actions and corresponding sentences of the criminals are given in Table 3.1.
Criminal 2
Don’t confess
Confess
Criminal 1
Don’t confess
-1,-1
-9,0
Confess
0,-9
-6,-6
Table 3.1: Prisoner’s dilemma
3.3.2 Assumptions and Definitions
Game: A game consists of players, the possible actions of the players, and consequences of the actions. The players are decision makers, who choose how they act. The actions of the players result in a consequence or outcome. The players try to ensure the best possible consequence according to their preferences.
The preferences of a player can be expressed either with a utility function, which maps every consequence to a real number, or with preference relations, which define the ranking of the consequences. With mild assumptions, a utility function can be constructed if the preference relations of a player are known [21].
Rationality: The most fundamental assumption in game theory is rationality. Rational players are assumed to maximize their payoff. If t.
I provide a (very) brief introduction to game theory. I have developed these notes to
provide quick access to some of the basics of game theory; mainly as an aid for students
in courses in which I assumed familiarity with game theory but did not require it as a
prerequisite
This presentation is an attempt to introduce Game Theory in one session. It's suitable for undergraduates. In practice, it's best used as a taster since only a portion of the material can be covered in an hour - topics can be chosen according to the interests of the class.
The main reference source used was 'Games, Theory and Applications' by L.C.Thomas. Further notes available at: http://bit.ly/nW6ULD
Richard's entangled aventures in wonderlandRichard Gill
Since the loophole-free Bell experiments of 2020 and the Nobel prizes in physics of 2022, critics of Bell's work have retreated to the fortress of super-determinism. Now, super-determinism is a derogatory word - it just means "determinism". Palmer, Hance and Hossenfelder argue that quantum mechanics and determinism are not incompatible, using a sophisticated mathematical construction based on a subtle thinning of allowed states and measurements in quantum mechanics, such that what is left appears to make Bell's argument fail, without altering the empirical predictions of quantum mechanics. I think however that it is a smoke screen, and the slogan "lost in math" comes to my mind. I will discuss some other recent disproofs of Bell's theorem using the language of causality based on causal graphs. Causal thinking is also central to law and justice. I will mention surprising connections to my work on serial killer nurse cases, in particular the Dutch case of Lucia de Berk and the current UK case of Lucy Letby.
3.3 Game TheoryGame theory is a branch of applied mathematics, w.docxgilbertkpeters11344
3.3 Game Theory
Game theory is a branch of applied mathematics, which deals with multi-person decision making situations. The basic assumption is that the decision makers pursue some well-defined objectives and take into account their knowledge or expectations of the other decision makers’ behavior. Many applications of game theory are related to economics, but it has been applied to numerous fields ranging from law enforcement [19] to voting decisions in European Union [20].
There are two main ways to capitalize game theory. It can be used to analyze existing systems or it can be used as a tool when designing new systems. Existing systems can be modeled as games. The models can be used to study the properties of the systems. For example, it is possible to analyze the effect of different kind of users on the system. The other approach is implementation theory, which is used when designing a new system. Instead of fixing a game and analyzing its outcome, the desired outcome is fixed and a game ending in that outcome is looked for. When a suitable game is discovered, a system fulfilling the properties of the game can be implemented.
Most game theoretical ideas can be presented without mathematics; hence we give only some formal definitions. Also, introduce one classical game, the prisoner’s dilemma which we use to demonstrate the concepts of game theory.
3.3.1 Prisoner’s Dilemma
In the prisoner’s dilemma, two criminals are arrested and charged with a crime. The police do not have enough evidence to convict the suspects, unless at least one confesses. The criminals are in separate cells, thus they are not able to communicate during the process. If neither confesses, they will be convicted of a minor crime and sentenced for one month. The police offer both the criminals a deal. If one confesses and the other does not, the confessing one will be released and the other will be sentenced for 9 months. If both confess, both will be sentenced for six months. The possible actions and corresponding sentences of the criminals are given in Table 3.1.
Criminal 2
Don’t confess
Confess
Criminal 1
Don’t confess
-1,-1
-9,0
Confess
0,-9
-6,-6
Table 3.1: Prisoner’s dilemma
3.3.2 Assumptions and Definitions
Game: A game consists of players, the possible actions of the players, and consequences of the actions. The players are decision makers, who choose how they act. The actions of the players result in a consequence or outcome. The players try to ensure the best possible consequence according to their preferences.
The preferences of a player can be expressed either with a utility function, which maps every consequence to a real number, or with preference relations, which define the ranking of the consequences. With mild assumptions, a utility function can be constructed if the preference relations of a player are known [21].
Rationality: The most fundamental assumption in game theory is rationality. Rational players are assumed to maximize their payoff. If t.
I provide a (very) brief introduction to game theory. I have developed these notes to
provide quick access to some of the basics of game theory; mainly as an aid for students
in courses in which I assumed familiarity with game theory but did not require it as a
prerequisite
This presentation is an attempt to introduce Game Theory in one session. It's suitable for undergraduates. In practice, it's best used as a taster since only a portion of the material can be covered in an hour - topics can be chosen according to the interests of the class.
The main reference source used was 'Games, Theory and Applications' by L.C.Thomas. Further notes available at: http://bit.ly/nW6ULD
Richard's entangled aventures in wonderlandRichard Gill
Since the loophole-free Bell experiments of 2020 and the Nobel prizes in physics of 2022, critics of Bell's work have retreated to the fortress of super-determinism. Now, super-determinism is a derogatory word - it just means "determinism". Palmer, Hance and Hossenfelder argue that quantum mechanics and determinism are not incompatible, using a sophisticated mathematical construction based on a subtle thinning of allowed states and measurements in quantum mechanics, such that what is left appears to make Bell's argument fail, without altering the empirical predictions of quantum mechanics. I think however that it is a smoke screen, and the slogan "lost in math" comes to my mind. I will discuss some other recent disproofs of Bell's theorem using the language of causality based on causal graphs. Causal thinking is also central to law and justice. I will mention surprising connections to my work on serial killer nurse cases, in particular the Dutch case of Lucia de Berk and the current UK case of Lucy Letby.
Multi-source connectivity as the driver of solar wind variability in the heli...Sérgio Sacani
The ambient solar wind that flls the heliosphere originates from multiple
sources in the solar corona and is highly structured. It is often described
as high-speed, relatively homogeneous, plasma streams from coronal
holes and slow-speed, highly variable, streams whose source regions are
under debate. A key goal of ESA/NASA’s Solar Orbiter mission is to identify
solar wind sources and understand what drives the complexity seen in the
heliosphere. By combining magnetic feld modelling and spectroscopic
techniques with high-resolution observations and measurements, we show
that the solar wind variability detected in situ by Solar Orbiter in March
2022 is driven by spatio-temporal changes in the magnetic connectivity to
multiple sources in the solar atmosphere. The magnetic feld footpoints
connected to the spacecraft moved from the boundaries of a coronal hole
to one active region (12961) and then across to another region (12957). This
is refected in the in situ measurements, which show the transition from fast
to highly Alfvénic then to slow solar wind that is disrupted by the arrival of
a coronal mass ejection. Our results describe solar wind variability at 0.5 au
but are applicable to near-Earth observatories.
A brief information about the SCOP protein database used in bioinformatics.
The Structural Classification of Proteins (SCOP) database is a comprehensive and authoritative resource for the structural and evolutionary relationships of proteins. It provides a detailed and curated classification of protein structures, grouping them into families, superfamilies, and folds based on their structural and sequence similarities.
The increased availability of biomedical data, particularly in the public domain, offers the opportunity to better understand human health and to develop effective therapeutics for a wide range of unmet medical needs. However, data scientists remain stymied by the fact that data remain hard to find and to productively reuse because data and their metadata i) are wholly inaccessible, ii) are in non-standard or incompatible representations, iii) do not conform to community standards, and iv) have unclear or highly restricted terms and conditions that preclude legitimate reuse. These limitations require a rethink on data can be made machine and AI-ready - the key motivation behind the FAIR Guiding Principles. Concurrently, while recent efforts have explored the use of deep learning to fuse disparate data into predictive models for a wide range of biomedical applications, these models often fail even when the correct answer is already known, and fail to explain individual predictions in terms that data scientists can appreciate. These limitations suggest that new methods to produce practical artificial intelligence are still needed.
In this talk, I will discuss our work in (1) building an integrative knowledge infrastructure to prepare FAIR and "AI-ready" data and services along with (2) neurosymbolic AI methods to improve the quality of predictions and to generate plausible explanations. Attention is given to standards, platforms, and methods to wrangle knowledge into simple, but effective semantic and latent representations, and to make these available into standards-compliant and discoverable interfaces that can be used in model building, validation, and explanation. Our work, and those of others in the field, creates a baseline for building trustworthy and easy to deploy AI models in biomedicine.
Bio
Dr. Michel Dumontier is the Distinguished Professor of Data Science at Maastricht University, founder and executive director of the Institute of Data Science, and co-founder of the FAIR (Findable, Accessible, Interoperable and Reusable) data principles. His research explores socio-technological approaches for responsible discovery science, which includes collaborative multi-modal knowledge graphs, privacy-preserving distributed data mining, and AI methods for drug discovery and personalized medicine. His work is supported through the Dutch National Research Agenda, the Netherlands Organisation for Scientific Research, Horizon Europe, the European Open Science Cloud, the US National Institutes of Health, and a Marie-Curie Innovative Training Network. He is the editor-in-chief for the journal Data Science and is internationally recognized for his contributions in bioinformatics, biomedical informatics, and semantic technologies including ontologies and linked data.
This pdf is about the Schizophrenia.
For more details visit on YouTube; @SELF-EXPLANATORY;
https://www.youtube.com/channel/UCAiarMZDNhe1A3Rnpr_WkzA/videos
Thanks...!
Nutraceutical market, scope and growth: Herbal drug technologyLokesh Patil
As consumer awareness of health and wellness rises, the nutraceutical market—which includes goods like functional meals, drinks, and dietary supplements that provide health advantages beyond basic nutrition—is growing significantly. As healthcare expenses rise, the population ages, and people want natural and preventative health solutions more and more, this industry is increasing quickly. Further driving market expansion are product formulation innovations and the use of cutting-edge technology for customized nutrition. With its worldwide reach, the nutraceutical industry is expected to keep growing and provide significant chances for research and investment in a number of categories, including vitamins, minerals, probiotics, and herbal supplements.
Professional air quality monitoring systems provide immediate, on-site data for analysis, compliance, and decision-making.
Monitor common gases, weather parameters, particulates.
6. Game Theory 博弈论
Game theory is the study of how people
interact and make decisions.
This broad definition applies to most of the social
sciences, but game theory applies mathematical
models to this interaction under the assumption that
each person's behavior impacts the well-being of all
other participants in the game. These models are often
quite simplified abstractions of real-world interactions.
6
7. A cultural comment
The Chinese translation “博弈论”
may be a little bit misleading.
Games are serious stuffs in
western culture.
– The Great Game: the strategic rivalry and
conflict between the British Empire and the Russian
Empire for supremacy in Central Asia (1813-1907).
– Wargaming: informal name for military
simulations, in which theories/tactics of warfare can
be tested and refined without the need for actual
hostilities.
7
8. The Great Game:
8
Political cartoon depicting the Afghan Emir Sher Ali with his "friends" the Russian
Bear and British Lion (1878)
9. What is Game Theory?
Game theory is a study of how to
mathematically determine the best strategy
for given conditions in order to optimize the
outcome
“how rational individuals make decisions when they are aware that
their actions affect each other and when each individual takes
this into account”
9
11. Brief History of Game Theory
Game theoretic notions go back thousands
of years (Sun Tzu‘s writings孙子兵法)
1913 - E. Zermelo provides the first theorem of
game theory; asserts that chess is strictly determined
1928 - John von Neumann proves the
minimax theorem
1944 - John von Neumann & Oskar
Morgenstern write "Theory of Games and
Economic Behavior”
1950-1953 - John Nash describes Nash
equilibrium (Nobel price 1994)
11
13. Rationality
Assumptions:
humans are rational beings
humans always seek the best alternative
in a set of possible choices
Why assume rationality?
narrow down the range of possibilities
predictability
13
14. Utility Theory
Utility Theory based on:
rationality
maximization of utility
– may not be a linear function of income or
wealth
14
Utility is a quantification of a person's preferences with
respect to certain behavior as oppose to other possible ones.
15. Game Theory in the Real World
Economists
innovated antitrust policy
auctions of radio spectrum licenses for cell phone
program that matches medical residents to hospitals.
Computer scientists
new software algorithms and routing protocols
Game AI
Military strategists
nuclear policy and notions of strategic deterrence.
Sports coaching staffs
run versus pass or pitch fast balls versus sliders.
Biologists
what species have the greatest likelihood of extinction.
15
16. What are the Games in Game Theory?
For Game Theory, our focus is on games where:
– There are 2 or more players.
– There is some choice of action where strategy matters.
– The game has one or more outcomes, e.g. someone
wins, someone loses.
– The outcome depends on the strategies chosen by all
players; there is strategic interaction.
What does this rule out?
– Games of pure chance, e.g. lotteries, slot machines.
(Strategies don't matter).
– Games without strategic interaction between players,
e.g. Solitaire.
16
17. Game Theory
Finding acceptable, if not optimal,
strategies in conflict situations.
An abstraction of real complex situation
Assumes all human interactions can be
understood and navigated by
presumptions
– players are interdependent
– uncertainty: opponent’s actions are not entirely
predictable
– players take actions to maximize their
gain/utilities
17
18. 18
Types of games
zero-sum or non-zero-sum [if the total payoff of
the players is always 0]
cooperative or non-cooperative [if players can
communicate with each other]
complete or incomplete information [if all the
players know the same information]
two-person or n-person
Sequential vs. Simultaneous moves
Single Play vs. Iterated
19. Essential Elements of a Game
1. The players
• how many players are there?
• does nature/chance play a role?
2. A complete description of what the players can
do – the set of all possible actions.
3. The information that players have available when
choosing their actions
4. A description of the payoff consequences for
each player for every possible combination of
actions chosen by all players playing the game.
5. A description of all players’ preferences over
payoffs.
19
20. Normal Form
Representation of Games
A common way of representing games,
especially simultaneous games, is
the normal form representation, which uses
a table structure called a payoff matrix to
represent the available strategies (or
actions) and the payoffs.
20
21. 21
A payoff matrix: “to Ad or not to Ad”
PLAYERS
STRATEGIES
PAYOFFS
Philip Morris
No Ad Ad
Reynolds
No Ad 50 , 50 20 , 60
Ad 60 , 20 30 , 30
22. The Prisoners' Dilemma囚徒困境
Two players, prisoners 1, 2.
Each prisoner has two possible actions.
– Prisoner 1: Don't Confess, Confess
– Prisoner 2: Don't Confess, Confess
Players choose actions simultaneously without
knowing the action chosen by the other.
Payoff consequences quantified in prison years.
– If neither confesses, each gets 3 year
– If both confess, each gets 5 years
– If 1 confesses, he goes free and other gets 10 years
– Prisoner 1 payoff first, followed by prisoner 2 payoff
– Payoffs are negative, it is the years of loss of freedom
22
25. Prisoner’s Dilemma :
Example of Non-Zero Sum Game
A zero-sum game is one in which the players'
interests are in direct conflict, e.g. in football, one
team wins and the other loses; payoffs sum to zero.
A game is non-zero-sum, if players interests are
not always in direct conflict, so that there are
opportunities for both to gain.
For example, when both players choose Don't
Confess in the Prisoners' Dilemma
25
26. Zero-Sum Games
The sum of the payoffs remains constant
during the course of the game.
Two sides in conflict
Being well informed always helps a
player
26
27. Non-zero Sum Game
The sum of payoffs is not constant during
the course of game play.
Some nonzero-sum games are positive
sum and some are negative sum
Players may co-operate or compete.
27
28. Information
Players have perfect information if they know
exactly what has happened every time a decision
needs to be made, e.g. in Chess.
Otherwise, the game is one of imperfect
information.
28
29. Imperfect Information
Partial or no information concerning the
opponent is given in advance to the
player’s decision, e.g. Prisoner’s Dilemma.
Imperfect information may be
diminished over time if the same game
with the same opponent is to be repeated.
29
30. Games of Perfect Information
The information concerning an
opponent’s move is well known in
advance, e.g. chess.
All sequential move games are of this
type.
30
31. Games of Co-operation
Players may improve payoff through
communicating
forming binding coalitions & agreements
do not apply to zero-sum games
Prisoner’s Dilemma
with Cooperation
31
32. Games of Conflict
Two sides competing against each other
Usually caused by complete lack of
information about the opponent or the
game
Characteristic of zero-sum games
32
35. 35
Zero-sum game matrices are sometimes
expressed with only one number in each box,
in which case each entry is interpreted as a
gain for row-player and a loss for column-
player.
36. Strategies
• A strategy is a “complete plan of action” that fully
determines the player's behavior, a decision rule or set
of instructions about which actions a player should take
following all possible histories up to that stage.
• The strategy concept is sometimes (wrongly) confused
with that of a move. A move is an action taken by a
player at some point during the play of a game (e.g., in
chess, moving white's Bishop a2 to b3).
• A strategy on the other hand is a complete algorithm for
playing the game, telling a player what to do for every
possible situation throughout the game.
36
37. Dominant or dominated strategy
A strategy S for a player A is dominant if it
is always the best strategies for player A no
matter what strategies other players will
take.
A strategy S for a player A is dominated if
it is always one of the worst strategies for
player A no matter what strategies other
players will take.
37
38. If you have a dominant strategy,
use it!
Use
strategy 1
38
39. 39
Dominance Solvable
If each player has a dominant strategy, the game is
dominance solvable
COMMANDMENT
If you have a dominant strategy, use it.
Expect your opponent to use his/her dominant strategy
if he/she has one.
40. 40
Only one player has a
Dominant Strategy
For The Economist:
– G dominant, S dominated
Dominated Strategy:
There exists another strategy which always does better regardless
of opponents’ actions
The Economist
G S
Time
S 100 , 100 0 , 90
G 95 , 100 95 , 90
41. How to recognize a Dominant Strategy
41
To determine if the row player has any dominant strategy
1.Underline the maximum payoff in each column
2.If the underlined numbers all appear in a row, then it is
the dominant strategy for the row player
No dominant strategy for the row player in this example.
42. How to recognize a Dominant Strategy
42
To determine if the column player has any dominant strategy
1.Underline the maximum payoff in each row
2.If the underlined numbers all appear in a column, then it is the
dominant strategy for the column player
There is a dominant strategy for the column player in this example.
43. 43
If there is no dominant strategy
Does any player have a dominant strategy?
If there is none, ask “Does any player have
a dominated strategy?”
If yes, then
Eliminate the dominated strategies
Reduce the normal-form game
Iterate the above procedure
45. 45
Successive Elimination of
Dominated Strategies
If a strategy is dominated, eliminate it
The size and complexity of the game is
reduced
Eliminate any dominant strategies from the
reduced game
Continue doing so successively
46. 46
Example: Two competing Bars
Two bars (bar 1, bar 2) compete
Can charge price of $2, $4, or $5 for a drink
6000 tourists pick a bar randomly
4000 natives select the lowest price bar
$2 $4 $5
Bar 1
$2 10 , 10 14 , 12 14 , 15
$4 12 , 14 20 , 20 28 , 15
$5 15 , 14 15 , 28 25 , 25
Bar 2
No dominant strategy for the both players.
48. 48
An example for Successive Elimination of strictly dominated
strategies, or the process of iterated dominance
49. Equilibrium
The interaction of all players' strategies results in an
outcome that we call "equilibrium."
Traditional applications of game theory attempt to
find equilibria in games.
In an equilibrium, each player is playing the strategy
that is a "best response" to the strategies of the other
players. No one is likely to change his strategy given
the strategic choices of the others.
Equilibrium is not:
The best possible outcome. Equilibrium in the one-shot prisoners'
dilemma is for both players to confess.
A situation where players always choose the same action.
Sometimes equilibrium will involve changing action choices
(known as a mixed strategy equilibrium). 49
50. Definition: Nash Equilibrium
“If there is a set of strategies with the
property that no player can benefit by
changing his/her strategy while the other
players keep their strategies unchanged,
then that set of strategies and the
corresponding payoffs constitute the Nash
Equilibrium.”
Source: http://www.lebow.drexel.edu/economics/mccain/game/game.html
50
51. Nash equilibrium
If each player has chosen a strategy and no
player can benefit by changing his/her
strategy while the other players keep theirs
unchanged, then the current set of strategy
choices and the corresponding payoffs
constitute a Nash equilibrium.
51
55. Prisoner’s Dilemma :
Applications
Relevant to:
– Nuclear arms races.
– Dispute Resolution and the decision to hire a
lawyer.
– Corruption/political contributions between
contractors and politicians.
How do players escape this dilemma?
– Play repeatedly
– Find a way to ‘guarantee’ cooperation
– Change payoff structure
55
58. Environmental policy
prisoner's dilemma in disguise
58
Factory C
pollution No
pollution
Factory R
pollution
50 , 50 60 , 20
No
pollution
20 , 60 20 , 20
Two factories producing same chemical can choose to
pollute (lower production cost) or not to pollute (higher
production cost).
59. Tragedy of the Commons
Game theory can be used to explain overuse of shared resources.
Extend the Prisoner’s Dilemma to more than two players.
Each member of a group of neighboring farmers prefers
to allow his cow to graze on the commons, rather than
keeping it on his own inadequate land, but the
commons will be rendered unsuitable for grazing if it is
overgrazed.
A cow costs a dollars and can be grazed on common
land.
The value of milk produced (f(c) ) depends on the
number of cows on the common land. Per cow: f(c) / c
59
60. Tragedy of the Commons
To maximize total wealth of the entire
village: max f(c) – ac.
– Adding another cow is exactly equal to the cost
of the cow.
What if each villager gets to decide whether
to add a cow?
Each villager will add a cow as long as the
cost of adding that cow to that villager is
outweighed by the gain in milk.
60
61. Tragedy of the Commons
When a villager adds a cow:
– Output per cow goes from f(c) /c to f(c+1) / (c+1)
– Cost is a
– His benefit is g(c)n where g(c)=f(c)/c – a is the gain per
cow, and n is the number of cows he owns
Each villager will add cows until output - cost = 0.
Problem: each villager is making a local decision
(will I gain by adding cows), but creating a net
global effect (everyone suffers)
61
62. Tragedy of the Commons
a form of payoff matrix
62
Your neighbor
Add a cow Don’t add
add
a cow
g(c+2)(n+1) g(c+1)(n+1)
Don’t
add
g(c+1)n g(c)n
As long as g is independent of c, adding cow is the dominant
strategy for everybody.
63. 63
Tragedy of the Commons
more general form of payoff matrix
Pay the cost
Deny to pay
B=benefit
C<0 is the cost
All others
64. Tragedy of the Commons
Problem: cost of maintenance is externalized
– Farmers don’t adequately pay for their impact.
– Resources are overused due to inaccurate estimates of
cost.
Relevant to:
– IT budgeting
– Bandwidth usage, Shared communication channels
– Health or other social benefits
– Environmental laws, overfishing, whaling, pollution,
etc.
64
65. Cost to press
button = 2 units
When button is pressed,
food given = 10 units
Another Example:
Big & Little Pigs
65
66. Decisions, decisions...
66
What’s the best strategy for the little pig? Does he have a dominant
strategy?
Does the big pig have a dominant strategy?
68. Maximin & Minimax
Equilibrium in a zero-sum game
Minimax - minimizing the maximum loss
(loss-ceiling, defensive)
Maximin - maximizing the minimum gain
(gain-floor, offensive)
Minimax = Maximin
68
70. 70
A zero-sum game with a saddle point.
Saddle point
1
3
4 3
Is this a Nash
Equilibrium?
MaxiMin
MiniMax
71. The Minimax Theorem
“Every finite, two-person, zero-sum game
has a rational solution in the form
of a pure or mixed strategy.”
John Von Neumann, 1926
For every two-person, zero-sum game with finite strategies, there
exists a value V and a mixed strategy for each player, such that (a)
Given player 2's strategy, the best payoff possible for player 1 is V,
and (b) Given player 1's strategy, the best payoff possible for
player 2 is −V.
71
72. Two-Person, Zero-Sum Games:
Summary
Represent outcomes as payoffs to row player
Find any dominating equilibrium
Evaluate row minima and column maxima
If maximin=minimax, players adopt pure strategy
corresponding to saddle point; choices are in stable
equilibrium -- secrecy not required
If maximin minimax, find optimal mixed
strategy; secrecy essential
72
73. Summary: Look for any
equilibrium
Dominating Equilibrium
Minimax Equilibrium
Nash Equilibrium
73
74. Pure & mixed strategies
74
A pure strategy provides a complete definition of how
a player will play a game. It determines the move a
player will make for any situation they could face.
A mixed strategy is an assignment of a probability to
each pure strategy. This allows for a player to randomly
select a pure strategy.
In a pure strategy a player chooses an action for sure,
whereas in a mixed strategy, he chooses a probability
distribution over the set of actions available to him.
75. All you need to know about
Probability
75
If E is an outcome of action, then P(E) denotes the
probability that E will occur, with the following
properties:
1. 0 P(E) 1 such that:
If E can never occur, then P(E) = 0
If E is certain to occur, then P(E) = 1
2. The probabilities of all the possible outcomes
must sum to 1
76. Mixed strategies
76
Some games, such as Rock-Paper-Scissors, do not have a
pure strategy equilibrium. In this game, if Player 1 chooses R,
Player 2 should choose p, but if Player 2 chooses p, Player 1 should choose S.
This continues with Player 2 choosing r in response to the choice S by Player
1, and so forth.
In games like Rock-Paper-Scissors, a player will want to
randomize over several actions, e.g. he/she can choose R, P & S
in equal probabilities.
77. 77
no
no
No Nash equilibrium for pure strategy
x y 1-x-y
x=probability to take
action R
y=probability to take
action S
1-x-y=probability to take
action P
Mixed strategies
78. 78
They have to be equal if expected payoff
independent of action of player 2
79. Two-Person, Zero-Sum Game:
Mixed Strategies
0 5
10 -2
Column Player:
Row Player:
Matrix of
Payoffs to
Row
Player:
1
2
A B
0
-2
10 5
Column Maxima:
Row
Minima:
79
No dominating strategy
80. Two-Person, Zero-Sum Game:
Mixed Strategies
0 5
10 -2
Column Player:
Row Player:
Matrix of
Payoffs to
Row
Player:
1
2
A B
0
-2
10 5
Column Maxima:
Row
Minima:
MaxiMin
MiniMax
No Saddle Point!
MaxiMin MiniMax 80
91. A truel is like a duel, except that three players. Each player can
either fire, or not fire, his or her gun at either of the other two
players. The players’ preferences are: lone survival (the best = 4),
survival with another player (the second best = 3), all players’
survival (the second worst=2), the players’ own death (worst
case=1).
If they have to make their choice simultaneously, what will they
do?
Ans. All of them will fire at either one of the other two players.
If their choices are made sequentially (A>B>C>A>B>…) and
the game will continue until only one player lift, what will they
do?
Ans. They will never shoot.
91
93. Example: The paradox of the Chair’s Position
Three voters ABC are electing the chairperson among them.
Voter A has 3 votes. Voters B and C have 2 votes each. Voter A’s
preference is (ABC). Voter B’s preference is (BCA). Voter C’s
preference is (CAB).
Who will win if voters vote their first preference? (sincere
voting)
Who will win if voters will consider what other players may
do? (sophisticated voting)
93
94. If voters vote sincerely,
Voters A will vote for voter A, voters B will vote for voter B,
voters C will vote for voter C. So, the winner is voter A.
Let’s consider voters A and BC as follows.
A (BC) AB BB BC ……….
A A B A
B B B B
C C B C
So, the dominant strategy for voter A is voting for A.
Assuming voter A will vote for A, let’s consider voters B and
C.
94
95. BC A B C
A A A A
B A B A
C A A C
So, the dominant strategy for voter C is voting for C. Assuming
voters A and C will vote for A and C respectively, let’s consider
voter B. B votes for A B C
result A A C
So, the dominant strategy for voter B is voting for C. As a result,
voters A, B and C will vote for A, C and C, respectively. So, the
winner is voter C.
95
96. Impact of game theory
Nash earned the Nobel Prize for economics in 1994 for his
“pioneering analysis of equilibria in the theory of non-
cooperative games”
Nash equilibrium allowed economist Harsanyi to explain “the
way that market prices reflect the private information held by
market participants” work for which Harsanyi also earned the
Nobel Prize for economics in 1994
Psychologist Kahneman earned the Nobel prize for economics
in 2002 for “his experiments showing ‘how human decisions
may systematically depart from those predicted by standard
economic theory’”
96
97. Fields affected by Game Theory
Economics and business
Philosophy and Ethics
Political and military sciences
Social science
Computer science
Biology
97
Editor's Notes
12/4/2022
12/4/2022
A Beautiful Mind is a 2001 American film based on the life of John Forbes Nash, Jr., a Nobel Laureate in Economics.
A Beautiful Mind is an unauthorized biography of Nobel Prize-winning economist and mathematician John Forbes Nash, Jr. by Sylvia Nasar, a New York Times economics correspondent. It inspired the 2001 film by the same name.
12/4/2022
12/4/2022
Solitaire, also called Patience, often refers to single-player card games involving a layout of cards with a goal of sorting them in some manner. However it is possible to play the same games competitively (often a head to head race) and cooperatively. The term solitaire is also used for single-player games of concentration and skill using a set layout of tiles, pegs or stones rather than cards. These games include Peg solitaire and Shanghai solitaire.
12/4/2022
12/4/2022
12/4/2022
12/4/2022
12/4/2022
12/4/2022
12/4/2022
http://wapedia.mobi/en/Strategy_%28game_theory%29
http://www.smallparty.com/yoram/classes/principles/nash.pdf
Even when a player doesn’t have a dominant strategy (i.e., a best strategy, regardless of what the other players do), that player might
still have one strategy that dominates another (i.e., a strategy A that is better than strategy B, regardless of what the other players do).
As suggested by the terms “best” and “better”, the difference here is between a superlative statement (e.g., “Jane is the best athlete in the class”) and a comparative statement (“Jane is a better athlete than Ted”); because comparatives are weaker statements, we can use them in situations where we might not be able to use superlatives.
12/4/2022
Two firms competing over sales
Time and The Economist must decide upon the cover story to run some week.
The big stories of the week are:
A presidential scandal (labeled S), and
A proposal to deploy US forces to Grenada (G)
Neither knows which story the other magazine will choose to run
12/4/2022
http://www.smallparty.com/yoram/classes/principles/nash.pdf
Question: Does the order of elimination matter?
Answer: Although it is not obvious, the end result of iterated strict dominance is always the same regardless of the sequence of eliminations. In other words, if in some game you can either eliminate U for Player 1 or L for Player 2, you don’t need to worry about which one to “do first”: either way you’ll end up at the same answer.
If you eliminate a strategy when there is some other strategy that yields payoffs that are higher or equal no matter what the other players do, you are doing iterated weak dominance, and in this case you will not always get the same answer regardless of the sequence of eliminations. (For an example see problem 10.) This is a serious problem, and helps explain why we focus on iterated strict dominance.
In game theory, a solution concept is a formal rule for predicting how the game will be played. These predictions are called "solutions", and describe which strategies will be adopted by players, therefore predicting the result of the game. The most commonly used solution concepts are equilibrium concepts, most famously Nash equilibrium.
Traditional applications of game theory attempt to find equilibria in these games. In an equilibrium, each player of the game has adopted a strategy that they are unlikely to change. Many equilibrium concepts have been developed (most famously the Nash equilibrium) in an attempt to capture this idea. These equilibrium concepts are motivated differently depending on the field of application, although they often overlap or coincide. This methodology is not without criticism, and debates continue over the appropriateness of particular equilibrium concepts, the appropriateness of equilibria altogether, and the usefulness of mathematical models more generally.
An equilibrium s = (s1, . . . , sn) is a strategy profile consisting of a best strategy for each of the n players in the game.
The equilibrium strategies are the strategies players pick in trying to maximize their individual payoffs, as distinct from the many possible strategy profiles obtainable by arbitrarily choosing one strategy per player.
http://www.smallparty.com/yoram/classes/principles/nash.pdf
A shortcut (but one you should use carefully!) is to underline each player’s best responses.1 To apply this to the game in Figure 11.5, first assume that Player 2 plays L; Player 1’s best response is to play U, so underline the “5” in the box corresponding to (U, L). Next assume that Player 2 plays C; Player 1’s best response is to play D, so underline the “3” in the box corresponding to (D,C). Finally, assume that Player 2 plays R; Player 1’s best response is to play M, so underline the “4” in the box corresponding to (M, R). Now do the same thing for Player 2: go through all of Player 1’s options and underline the best response for Player 2. (Note that C and R are both best responses when Player 1 plays M!) We end up with Figure 11.6b: the only boxes with both payoffs underlined are (D, C) and (M, R), the Nash equilibria of the game.
http://plato.stanford.edu/entries/prisoner-dilemma/
Each member of a group of neighboring farmers prefers to allow his cow to graze on the commons, rather than keeping it on his own inadequate land, but the commons will be rendered unsuitable for grazing if it is used by more than some threshold number use it.
More generally, there is some social benefit B that each member can achieve if sufficiently many pay a cost C.
The cost C is assumed to be a negative number. The “temptation” here is to get the benefit without the cost, the reward is the benefit with the cost, the punishment is to get neither and the sucker payoff is to pay the cost without realizing the benefit. So the payoffs are ordered B > (B+C) > 0 > C. As in the two-player game, it appears that D strongly dominates C for all players, and so rational players would choose D and achieve 0, while preferring that everyone would choose C and obtain C+B.
http://plato.stanford.edu/entries/prisoner-dilemma/
12/4/2022
12/4/2022
12/4/2022
12/4/2022
The outcome of the game depicted in the Figure is (B,R): the maximizer (Rose) wins 3 and the minimizer (Colin) loses 3. Neither player has any incentive to deviate from this outcome. Rather than play B, Rose could play T , but then she would win only 2; rather than play R, Colin could play L, but then he would lose 4 instead of 3. The entry 3 in this matrix game is called a saddle point.
The minimax and maximin values of a zero-sum game coincide iff the game has a saddle point, in which case the value of the game is precisely
the value of the saddle point.
A saddle point in a zero-sum game is an equilibrium in pure actions. It is an action pair from which neither player has any incentive to deviate. But saddle points need not exist.
Equivalently, Player 1's strategy guarantees him a payoff of V regardless of Player 2's strategy, and similarly Player 2 can guarantee himself a payoff of −V.
12/4/2022
There are a number of motivations given in undergraduate textbooks regarding the need for, and use of, mixed strategies.
Pindyck and Rubinfeld (2005) state that,‘there are games… in which a pure strategy is not the best way to play. McCain (2004) describes the need for a mixed strategy when the player would benefit from being ‘unpredictable, so that the opposition cannot guess which strategy is coming and prepare accordingly’. Bernheim and Whinston (2008) support this by motivating their discussion on mixed strategies with‘the key to success… is unpredictability.…The most obvious choice is to make choices randomly. Baldani et al. (2005) write:‘Not all games have
pure strategy Nash equilibria in which each player chooses a single strategy with probability one. There are important economic applications that only have solutions in mixed strategies in which a player randomizes by choosing the probabilities for playing the possible pure strategies.’
http://www.economicsnetwork.ac.uk/iree/v7n2/garrett.pdf
If x>12/17, column player can take action A to decrease row player’s expected payoff.
If x<12/17, column player can take action B to decrease row player’s expected payoff.