Strategic Interaction: The whole purpose of Game theory is to determine the other person’s choice.
Your wellbeing depends on your choice and your competitor (other player’s) choice, and vice versa
You NEED three things:
1. List of PLAYERS
2. A list of the ACTIONS that they can potentially take – these lists are called action sets. These can
differ across players. Outcome of the game is what is called an action profile----> simply shows
action taken by each player. An action profile describes the action of all players. Some actions
are good for players, some are not.
3. For each function you need a PAY OFF function indicating how well off he is under each possible
If you are missing any of these elements, you don’t have a game.
One player (placer will flip a coin) and the other pl