# Essay about Game Theory Introduction

Introduction to Game Theory

Econ 414

Jeﬀ Borowitz

Summer I 2010

Jeﬀ Borowitz

Introduction to Game Theory

1 / 18

Game Theory Background An Illustrative Example Course Structure

Rational Choice

What is Game Theory?

Game Theory is really “Multi-Party Decision Theory” Outside of game theory, we think of just one actor (ﬁrms maximizing proﬁts, workers deciding how much to work, etc.) Decisions involving many parties are very relevant to economics

Oligopoly Public Goods Working together on a team project

Jeﬀ Borowitz

Introduction to Game Theory

2 / 18

Game Theory Background An Illustrative Example Course Structure

Rational Choice

*…show more content…*

Jeﬀ Borowitz Introduction to Game Theory 7 / 18

Game Theory Background An Illustrative Example Course Structure

The Simpliﬁed Prisoner’s Dilemma

A single person decision

Bob is arrested and charged with a crime. He is thinking about what to do when he is interrogated If he confesses to the crime, he goes to jail for 4 years If he remains silent, there’s only enough evidence to send him to jail for 1 year.