Game theory
🏷️ MOOCS
Self-interested agent: an agent has own descriptions of the world and acts based on this description
Each agent has a utility function:
- Quantifies degree of preference toward the outcome
- Attitude toward uncertainty
- Decision-theoretic rationality: act to maximize expected utility
Game’s key ingredients
- Players
- Actions
- Payoffs
Normal form game <N, A, u>
- N: Players
- A: Action set
- u: Utility function
Nash equilibrium
A player can achieve the desired outcome by remaining their initial strategy
Each player’s strategy is optimal when knowing other player’s decisions
Players win because they get their own desired outcomes
A game may have multiple Nash equilirium or none at all
Mixed strategies
At least one player plays a random strategy
A player randomizes over two strategies if both produce the same expected payoff
The probalities of a player determine the expected payoff of the other player
https://www.coursera.org/learn/game-theory-introduction/home/week/1
https://www.investopedia.com/terms/n/nash-equilibrium.asp
https://saylordotorg.github.io/text_introduction-to-economic-analysis/s17-03-mixed-strategies.html