3. The Real Life Chessboard - Sequential Games Flashcards
What are sequential games?
Games that unfold over time
What are simultaneous games?
Everyone acts without knowing what the other players are doing
What is a game tree?
A diagram of a sequential game, where each node is controlled by one player, and nature can be a player as well, representing chance
What is a dominant strategy?
The best one player can do regardless of other strategies
What is rollback?
To look forward, you must reason backwards: game trees are analyzed from the payoffs back to the root
Do first movers have an advantage?
Not always. Order matters, but how it matters depends on the game
What is a cooperative game?
Binding agreements between players are possible
What are the requirements for a game tree?
A finite, deterministic, non-cooperative, sequential game with perfect information
What is perfect information
Everyone knows the whole history of the game when they move
What is a rollback equilibrium?
A steady decision point, always the right way to play the game
What is a Nash equilibrium?
No player gains from unilaterally changing their strategy
What is the relationship between rollback and Nash equilibria?
All rollback equilibria are Nash equilibria but not all Nash equilibria are rollback equilibria
What is subgame perfection?
If a game is restricted to a subgame, that game has a Nash equilibrium as well
