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15 Cards in this Set
- Front
- Back
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Game Theory
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Game theory is the study of strategic interactions.
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Strategy
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A strategy is a complete contingent plan that describes how a player will act in every eventuality in the game.
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Simultaneous Game or Matrix Game
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In simultaneous games, an action is the same as a strategy.
In matrix games (also called strategic form games) players pick their actions at the same time without knowing the other person's choice. |
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Payoff Matrix
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A payoff matrix represents the payoffs for each action players can take.
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Best Response
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A strategy of a player is a best response to the strategies of the others in the game if it gives her greater payoff than any other strategy she has available.
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Dominant (and Dominated) Strategy
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A dominated strategy is one best response to every possible strategy of the other players. A dominated strategy will always give lower payoffs than another action.
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Dominant Strategy Equilibrium
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A combination of strategies is a dominant strategy equilibrium if each strategy is a dominant strategy.
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Nash Equilibrium
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A strategy combination is a Nash Equilibrium if each strategy is a best response to the strategies of others.
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Zero Sum Game
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In a zero-sum game, one player's loss is another's gain, so the sum of the payoff is always zero.
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Pure Strategy
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A pure strategy involves choosing one particular action for a situation.
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Mixed Strategy
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A mixed strategy involves choosing different actions with different possibilities.
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Extensive Form Game
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An extensive-form game is a representation of a strategic situation in terms of a game tree that specifies the order of play and payoffs that will result from different strategies.
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Backward Induction
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Backward induction is the procedure of solving an extensive-form game by first considering the last mover’s decision in order to deduce the decisions of all previous movers.
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First mover advantage
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A game has first mover advantage when the first player to act in a sequential game gets a benefit from doing so.
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Commitment
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Commitment refers to the ability to choose and stick with an action that might later be costly.
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