unit 4 Flashcards
Game
model of strategic interaction that describes the players, the feasible strategies, the information that the players have, and their payoffs.
Best response
a strategy which will give the players the highest payoffs, given the strategies that other players choose.
Dominant strategy equilibrium
an outcome where the player plays their dominant strategy
Social dilemma
A situation in which actions taken independently by individuals in pursuit of their own private objectives result in an outcome which is inferior to some other feasible outcome that could have occurred if people had acted together, rather than as individuals.
Altruism
the willingness to bear a cost to benefit someone else
Reciprocity
preference to be kind or to help others who are kind and helpful, and to withhold help and kindness from people who are not helpful or kind.
Inequality aversion
dislike of outcomes in which some individuals receive more than others.
nash equilibrium
a set of strategies, one for each player of the game, such that each players is the best response to the strategies, where payoffs could be higher in another equilibrium
public good
a good which its use does not reduce its availability to someone else.
prisoners dilemma
A game in which the payoffs in the dominant strategy equilibrium are lower for each player, and also lower in total, than if neither player played the dominant strategy.
