ECON 2350 Lecture Notes - Lecture 16: Arms Control, Strategic Dominance, Nash Equilibrium
27 Feb 2017
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Example: rock paper scissors but enough of this theory. Let"s look at an example that really matters: the well-known pastime of rock paper scissors. In this game, each player simultaneously chooses to display a fist (rock), a palm (paper), or his first two fingers (scissors). The rules: rock breaks scissors, scissors cuts paper, paper wraps rock. Throughout history, countless hours have been spent in playing this game. There is even a professional society, the rps society, that promotes the game. It offer both a web site and a movie documenting the 2003 championships in toronto. Of course, game theorists recognize that the equilibrium strategy in rock paper scissors is to randomly choose one of the three outcomes. But humans are not necessarily so good at choosing totally random outcomes. If you can predict your opponent"s choices to some degree, you can have an edge in making your own choices. According to the somewhat tongue-in-cheek account of jennifer 8.
