Game Theory

Game theory can be considered the study of strategic decision-making. It applies mathematical models to understand how people make choices when their …

In game theory, a game is a scenario where players make decisions to achieve their goals, considering the possible choices of others. These games are …

Players are individuals or groups who make decisions. These decisions impact not only their outcomes but also those of other players. For example, in a …

Games can be classified as Zero-sum games and Non-zero-sum games. A Zero-sum game is one where the gain of one player is exactly equal to the loss of …

A payoff is an outcome that a player receives from participating in a game based on the actions they and their opponents choose. It can vary depending on …

A dominant strategy is one that results in the highest payoff for a player, no matter what the other players decide to do. Conversely, a dominated …

Equilibrium in dominant strategies occurs when each player chooses their best strategy regardless of what others do. This simplifies analysis since the …

A Nash Equilibrium occurs when all players in a game choose strategies that are best for them, given the strategies chosen by the others. No player can …

The matrix provided represents the payoffs of a Prisoner's Dilemma. To find the Nash Equilibrium, first consider Suspect A's options. If B remains …

Consider two rival mobile catering services, T-Truck and B-Van. They must independently choose to serve lunch either downtown or in the industrial area …

Burger Queen (BQ) and King's Burger (KB) are deciding whether to launch a new spicy burger during the summer, fall, or not at all. Both chains benefit …

Players typically select a pure strategy where they choose a specific action with certainty. However, not all games allow for pure strategies, leading …

A maximin strategy is used by a player to minimize potential losses in the worst-case scenario. The strategy involves choosing the option that maximizes …

Consider two companies in the electric vehicle charging market, both considering investing in ultra-fast charging technology. Here's their payoff …

Repeated games involve playing the same game multiple times with the same players. These games are crucial in understanding how decisions evolve over …

An infinitely repeated game is one in which players repeatedly engage in the same game without a predetermined end. Examples include firms repeatedly …

Sequential games involve scenarios where one player moves first, and other players observe this action before making their own decisions. Decision trees …

Backward induction can be used to solve sequential games and find the perfect Nash equilibrium. It works by reasoning backward from the end of the game to …

Side payments are a strategy where one player offers something to the opponent to persuade them to act in a way that benefits the first player. Let's …

In a sequential game, credible commitment means players make promises or threats they are likely to keep because they have no incentive to deviate from …

In game theory, entry deterrence discourages competitors from entering a market by creating credible threats or signals that make entry risky. Consider …

In game theory,'reputation to deter entry' explores how firms discourage competitors by building a reputation for aggressive responses. Consider …