ECON 3M03 Lecture Notes - Lecture 1: Teamwork, Extensive-Form Game, Normal-Form Game
8 Feb 2015
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Document Summary
Outline: what is a game, why study games, perfect information, extensive form for a 1-player game, two-person games with perfect information, weak dominance solvability, strict dominance solvability. A game characterized by: players, rules of game. Specifying what can and cannot be done by each player. Penalties for not following the rules: actions and strategies available to each player. Strategies matter: good and bad strategies (recommend good ones: outcomes of the game depends on chosen strategies, payoff for each player for each outcome given a strategy profile (depends on strategies taken by all players) A strategy profile a set of strategies, one for each player in the game. Solution to a game: what outcome to expect, how to achieve it find right strategy(ies): there may be more than one! Available information: makes big difference as to what players can or cannot do. Perfect information: a player knows exactly what has happened every time a decision needs to be made.
