lecture 7 Flashcards
what is a social interaction?
its situatuons in which the actions taken by each person affect other people’s outcomes as well as their own
what is a social dilema?
actions taken independently by individuals in pursuit od their own private objectives result in an outcome which is inferior to some other feasible outocme that could have occurred if people had acter together, rather than as individuals
what is a game theory? what it depends? which are the scenarios?
it is a framework of analysis in which two or more players compete for payoffs. A player’s payoff dependes on her and all other players decisions. 2 types of scenarios: competitive and cooperative
what is a stategic interaction?
a situation in which my optimal decision depends on what other do, and vice versa
what is a game (include de definition of player, strategy and payoff)?
game → formal model of a strategic interaction
player → participant in the game
strategy→ detailed plan of action for strategic interactions
payoff→ the final utility the pllayer obtains in the game, as a consequence of strategis of all players
what is the equilibrium?
preducted solution of the game
What is the prisioners’ dillema?
An interrogator keeps Prisoner 1 and Prisoner
2 in separate cells and interviews them
separately
* Players: Prisoner 1 and Prisoner 2
* Actions: each prisoner can either deny the charges or accuse the other prisoner
* Payoffs:
* The length of the sentence of each prisoner
depends on the action the other one
* (sentence of prisoner 1, sentence of prisoner 2)
what is a best response?
a strategy that gives a player the highest payoff, taking other players’ strategies as given
what is (nash) equilibrium?
given the other plyar’s strategy, neither player has an incentive to change strategie
That is, no one can increase one’s own expected
payoff by changing one’s strategy while the other
players keep theirs unchanged
what is a dominant strategy?
a strategy that yields the highest payoff for a player, regardless of what other players do
what is a dominant strategy equilibrium?
outcome of a game in which every player plays his or her dominat strategy
what is a dominated strategy?
a strategy that is not a best responde independently of others player’s strategy
It is NEVER played by a player
how do you solve the game?
Step 1: Quantify the payoffs
* Step 2: Find each player’s best response for each strategy the other could play
* Step 3: Find the Nash equilibrium
what is a coordination game?
if they have a pre-heist contract between players
what is the tragedy of the commons?
tendency for individuals to overuse and deplete common resouces because each individual user acts in their own self-interest, ignoring the long-tterm harm to the collective group
