Learning Objectives
6 objectives- Understand fundamental concepts and terminology of game theory including games, players, strategies, and payoffs.
- Differentiate between various types of games and analyze their structures.
- Explain and apply the concept of Nash equilibrium and dominant strategies in strategic decision-making.
- Explore classical examples such as the Prisoner's Dilemma to illustrate cooperation and conflict dynamics.
- Examine advanced topics including mixed strategies, extensive form games, behavioral and evolutionary game theory.
- Apply game theory principles to real-world scenarios across multiple disciplines.
Content Outline
PreviewUnit 2515: Introduction to Game Theory
1. Introduction to Game Theory
- Definition of a game
- Players: participants and their roles
- Strategies: possible actions
- Payoffs: outcomes and utilities
- Importance and applications of game theory
2. Types of Games
- Simultaneous Games: players choose strategies without knowledge of others’ choices
- Sequential Games: players make moves in sequence, with knowledge of earlier actions
- Cooperative Games: players can form binding agreements
- Non-Cooperative Games: no enforceable agreements
- Zero-Sum Games: one player’s gain equals another’s loss
- Non-Zero-Sum Games: outcomes can be mutually beneficial or harmful
3. Nash Equilibrium
- Definition and intuition
- Formal mathematical description
- Existence of Nash equilibria
- Examples in different game types
- Significance in predicting outcomes
4. Prisoner's Dilemma
- Description of the scenario
- Payoff matrix analysis
- Implications for cooperation and trust
- Real-world analogues and lessons
5. Mixed Strategies
- Concept of randomizing strategies
- When pure strategies fail
- Calculating mixed strategy equilibria
- Examples and applications
6. Extensive Form Games
- Game trees and representation
- Nodes, branches, and payoffs
- Information sets and imperfect information
- Backward induction method
- Examples of sequential decision-making
7. Dominant Strategies
- Definition and identification
- Dominant vs dominated strategies
- Role in simplifying game analysis
- Examples illustrating dominant strategies
8. Game Theory Applications
- Economics: market competition, auctions
- Business: negotiation, pricing strategies
- Political Science: voting, bargaining
- Biology: evolutionary strategies, animal behavior
- Other domains: computer science, sociology
9. Behavioral Game Theory
- Incorporation of psychological factors
- Deviations from purely rational behavior
- Experimental findings and models
- Concepts like fairness, trust, and bounded rationality
10. Evolutionary Game Theory
- Basics of evolutionary dynamics
- Replicator equations
- Evolution of strategies over time
- Applications in biology, sociology, and economics
- Stability concepts (evolutionarily stable strategies)
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