Game Theory with Translucent Players (2024)

FAQs

What is the game theory with translucent players? ›

We develop a framework for reasoning about games where the players may be translucent to one another; in particular, a player may believe that if she were to change strategies, then the other player would also change strategies.

A best response is a best strategy given what you think the other player will do. A dominant strategy is one that is a best response to all possible strategies. When players are mutually best responding, we have a Nash equilibrium.

There are several assumptions that are made in game theory. The players act rationally. In other words, they act in best of their interest. There is also assumption of maximization, that is, each player act to maximize their pay off.

The Nash equilibrium is a decision-making theorem within game theory that states a player can achieve the desired outcome by not deviating from their initial strategy. In the Nash equilibrium, each player's strategy is optimal when considering the decisions of other players.

In the three-person games, we find Nash equilibrium via movement diagrams and then break the game down into possible coalitions. This pits two players versus the third player. All possible coalitions are evaluated and their results are used to look for likely forming coalitions.

The three basic elements of any game are: A set of participants, or "players." The moves, or "actions," that each player may make. The scores, or "payoffs," that each player earns at the end of the game.

Summary. The dominant strategy in game theory refers to a situation where one player has a superior tactic regardless of how the other players act. The Nash Equilibrium is an optimal state of the game, where each opponent makes optimal moves while considering the other player's optimal strategies.

We say that an action is a never-best response if it is not optimal against any belief about other players' actions. A never-best response action is not rationalizable by definition.

What is a real life example of game theory? ›

The best example of game theory is a classical hypothesis called “Prisoners Dilemma”. According to this situation, two people are supposed to be arrested for stealing a car. They have to serve 2-year imprisonment for this.

The Prisoner's Dilemma is the most well-known example of game theory. Consider the example of two criminals arrested for a crime. Prosecutors have no hard evidence to convict them. However, to gain a confession, officials remove the prisoners from their solitary cells and question each one in separate chambers.

John von Neumann, whom people called Johnny, was a brilliant mathematician and physicist who also made three fundamental contributions to economics. The first is a 1928 paper written in German that established von Neumann as the father of game theory.

Classical game theory describes socially and temporally isolated encounters while evolutionary game theory describes macro-social behavioural regularities. The actors in classical game theory are payoff maximizers whose identity remains fixed during the course of play.

The Invisible Hand Theorem identifies conditions on a game under which there are again dominant strategies, but, this time, to be sure that the play of these strategies leads to the largest overall pie.

The Psychology of the Player

These categories are the Achiever, the Explorer, the Socializer, and the Killer. It's worth noting that these categories aren't rigid. Most people display some traits in more than one category. However, most people have a dominant trait which determines their overall preference.

Game theory is the study of mathematical models of strategic interactions among rational agents. It has applications in many fields of social science, used extensively in economics as well as in logic, systems science and computer science.