Lecture 7 Flashcards
in a game of perfect information, the player with the move knows…?
the full history of the play of the games thus far
What is the central issue in dynamic games?
Credibility
The extensive form of a game is a complete description of:
the set of players, what players know when they move, who moves when and what their choices are, and the player’s payoffs as a function of the choices that are made
what is a unique node?
beginning of a game tree, also called root
what is a decision node?
end of each branch within an extensive form game, this is where one player has to make a decision
if a node has no branches merging from it then it is called?
terminal node
what is an information set?
made up of nodes that are indistinguishable from the decision maker’s standpoint
What are the consistency requirements for a game tree?
no single starting point, no cycles, and no single immediate predecessor
What is a strategy?
a complete contingent plan
How is a strategy contingent?
it tells a player which branch to follow out of a decision node if the game arrives at that node
How is a strategy complete?
it tells him what to choose at every relevant decision node
What is a game of perfect information?
one in which all information sets are singleton sets. if at least one information set in the game contains more than one node, the game is one of imperfect information
What is the Kuhn and Zermelo Therorem?
every game of perfect information with a finite number of nodes has a solution by backward induction. indeed, if for every player it is the case that no two payoffs are the same, then there is a unique solution to backward induction
Backward induction in the extensive form of a game turns out to be exactly the same as
solving the game by IEDS in the normal form
What is one major motivation for studying backward induction?
Nash equilibria not always credible
