Real World Games Look Like Spinning Tops
Total Page:16
File Type:pdf, Size:1020Kb
Load more
Recommended publications
-
Game Theory 2: Extensive-Form Games and Subgame Perfection
Game Theory 2: Extensive-Form Games and Subgame Perfection 1 / 26 Dynamics in Games How should we think of strategic interactions that occur in sequence? Who moves when? And what can they do at different points in time? How do people react to different histories? 2 / 26 Modeling Games with Dynamics Players Player function I Who moves when Terminal histories I Possible paths through the game Preferences over terminal histories 3 / 26 Strategies A strategy is a complete contingent plan Player i's strategy specifies her action choice at each point at which she could be called on to make a choice 4 / 26 An Example: International Crises Two countries (A and B) are competing over a piece of land that B occupies Country A decides whether to make a demand If Country A makes a demand, B can either acquiesce or fight a war If A does not make a demand, B keeps land (game ends) A's best outcome is Demand followed by Acquiesce, worst outcome is Demand and War B's best outcome is No Demand and worst outcome is Demand and War 5 / 26 An Example: International Crises A can choose: Demand (D) or No Demand (ND) B can choose: Fight a war (W ) or Acquiesce (A) Preferences uA(D; A) = 3 > uA(ND; A) = uA(ND; W ) = 2 > uA(D; W ) = 1 uB(ND; A) = uB(ND; W ) = 3 > uB(D; A) = 2 > uB(D; W ) = 1 How can we represent this scenario as a game (in strategic form)? 6 / 26 International Crisis Game: NE Country B WA D 1; 1 3X; 2X Country A ND 2X; 3X 2; 3X I Is there something funny here? I Is there something funny here? I Specifically, (ND; W )? I Is there something funny here? -
Evolutionary Game Theory: ESS, Convergence Stability, and NIS
Evolutionary Ecology Research, 2009, 11: 489–515 Evolutionary game theory: ESS, convergence stability, and NIS Joseph Apaloo1, Joel S. Brown2 and Thomas L. Vincent3 1Department of Mathematics, Statistics and Computer Science, St. Francis Xavier University, Antigonish, Nova Scotia, Canada, 2Department of Biological Sciences, University of Illinois, Chicago, Illinois, USA and 3Department of Aerospace and Mechanical Engineering, University of Arizona, Tucson, Arizona, USA ABSTRACT Question: How are the three main stability concepts from evolutionary game theory – evolutionarily stable strategy (ESS), convergence stability, and neighbourhood invader strategy (NIS) – related to each other? Do they form a basis for the many other definitions proposed in the literature? Mathematical methods: Ecological and evolutionary dynamics of population sizes and heritable strategies respectively, and adaptive and NIS landscapes. Results: Only six of the eight combinations of ESS, convergence stability, and NIS are possible. An ESS that is NIS must also be convergence stable; and a non-ESS, non-NIS cannot be convergence stable. A simple example shows how a single model can easily generate solutions with all six combinations of stability properties and explains in part the proliferation of jargon, terminology, and apparent complexity that has appeared in the literature. A tabulation of most of the evolutionary stability acronyms, definitions, and terminologies is provided for comparison. Key conclusions: The tabulated list of definitions related to evolutionary stability are variants or combinations of the three main stability concepts. Keywords: adaptive landscape, convergence stability, Darwinian dynamics, evolutionary game stabilities, evolutionarily stable strategy, neighbourhood invader strategy, strategy dynamics. INTRODUCTION Evolutionary game theory has and continues to make great strides. -
Lecture Notes
GRADUATE GAME THEORY LECTURE NOTES BY OMER TAMUZ California Institute of Technology 2018 Acknowledgments These lecture notes are partially adapted from Osborne and Rubinstein [29], Maschler, Solan and Zamir [23], lecture notes by Federico Echenique, and slides by Daron Acemoglu and Asu Ozdaglar. I am indebted to Seo Young (Silvia) Kim and Zhuofang Li for their help in finding and correcting many errors. Any comments or suggestions are welcome. 2 Contents 1 Extensive form games with perfect information 7 1.1 Tic-Tac-Toe ........................................ 7 1.2 The Sweet Fifteen Game ................................ 7 1.3 Chess ............................................ 7 1.4 Definition of extensive form games with perfect information ........... 10 1.5 The ultimatum game .................................. 10 1.6 Equilibria ......................................... 11 1.7 The centipede game ................................... 11 1.8 Subgames and subgame perfect equilibria ...................... 13 1.9 The dollar auction .................................... 14 1.10 Backward induction, Kuhn’s Theorem and a proof of Zermelo’s Theorem ... 15 2 Strategic form games 17 2.1 Definition ......................................... 17 2.2 Nash equilibria ...................................... 17 2.3 Classical examples .................................... 17 2.4 Dominated strategies .................................. 22 2.5 Repeated elimination of dominated strategies ................... 22 2.6 Dominant strategies .................................. -
Econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Banerjee, Abhijit; Weibull, Jörgen W. Working Paper Evolution and Rationality: Some Recent Game- Theoretic Results IUI Working Paper, No. 345 Provided in Cooperation with: Research Institute of Industrial Economics (IFN), Stockholm Suggested Citation: Banerjee, Abhijit; Weibull, Jörgen W. (1992) : Evolution and Rationality: Some Recent Game-Theoretic Results, IUI Working Paper, No. 345, The Research Institute of Industrial Economics (IUI), Stockholm This Version is available at: http://hdl.handle.net/10419/95198 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Ind ustriens Utred n i ngsi nstitut THE INDUSTRIAL INSTITUTE FOR ECONOMIC AND SOCIAL RESEARCH A list of Working Papers on the last pages No. -
Collusion Constrained Equilibrium
Theoretical Economics 13 (2018), 307–340 1555-7561/20180307 Collusion constrained equilibrium Rohan Dutta Department of Economics, McGill University David K. Levine Department of Economics, European University Institute and Department of Economics, Washington University in Saint Louis Salvatore Modica Department of Economics, Università di Palermo We study collusion within groups in noncooperative games. The primitives are the preferences of the players, their assignment to nonoverlapping groups, and the goals of the groups. Our notion of collusion is that a group coordinates the play of its members among different incentive compatible plans to best achieve its goals. Unfortunately, equilibria that meet this requirement need not exist. We instead introduce the weaker notion of collusion constrained equilibrium. This al- lows groups to put positive probability on alternatives that are suboptimal for the group in certain razor’s edge cases where the set of incentive compatible plans changes discontinuously. These collusion constrained equilibria exist and are a subset of the correlated equilibria of the underlying game. We examine four per- turbations of the underlying game. In each case,we show that equilibria in which groups choose the best alternative exist and that limits of these equilibria lead to collusion constrained equilibria. We also show that for a sufficiently broad class of perturbations, every collusion constrained equilibrium arises as such a limit. We give an application to a voter participation game that shows how collusion constraints may be socially costly. Keywords. Collusion, organization, group. JEL classification. C72, D70. 1. Introduction As the literature on collective action (for example, Olson 1965) emphasizes, groups often behave collusively while the preferences of individual group members limit the possi- Rohan Dutta: [email protected] David K. -
Nash Equilibrium
Lecture 3: Nash equilibrium Nash equilibrium: The mathematician John Nash introduced the concept of an equi- librium for a game, and equilibrium is often called a Nash equilibrium. They provide a way to identify reasonable outcomes when an easy argument based on domination (like in the prisoner's dilemma, see lecture 2) is not available. We formulate the concept of an equilibrium for a two player game with respective 0 payoff matrices PR and PC . We write PR(s; s ) for the payoff for player R when R plays 0 s and C plays s, this is simply the (s; s ) entry the matrix PR. Definition 1. A pair of strategies (^sR; s^C ) is an Nash equilbrium for a two player game if no player can improve his payoff by changing his strategy from his equilibrium strategy to another strategy provided his opponent keeps his equilibrium strategy. In terms of the payoffs matrices this means that PR(sR; s^C ) ≤ P (^sR; s^C ) for all sR ; and PC (^sR; sC ) ≤ P (^sR; s^C ) for all sc : The idea at work in the definition of Nash equilibrium deserves a name: Definition 2. A strategy s^R is a best-response to a strategy sc if PR(sR; sC ) ≤ P (^sR; sC ) for all sR ; i.e. s^R is such that max PR(sR; sC ) = P (^sR; sC ) sR We can now reformulate the idea of a Nash equilibrium as The pair (^sR; s^C ) is a Nash equilibrium if and only ifs ^R is a best-response tos ^C and s^C is a best-response tos ^R. -
Lecture Notes
Chapter 12 Repeated Games In real life, most games are played within a larger context, and actions in a given situation affect not only the present situation but also the future situations that may arise. When a player acts in a given situation, he takes into account not only the implications of his actions for the current situation but also their implications for the future. If the players arepatient andthe current actionshavesignificant implications for the future, then the considerations about the future may take over. This may lead to a rich set of behavior that may seem to be irrational when one considers the current situation alone. Such ideas are captured in the repeated games, in which a "stage game" is played repeatedly. The stage game is repeated regardless of what has been played in the previous games. This chapter explores the basic ideas in the theory of repeated games and applies them in a variety of economic problems. As it turns out, it is important whether the game is repeated finitely or infinitely many times. 12.1 Finitely-repeated games Let = 0 1 be the set of all possible dates. Consider a game in which at each { } players play a "stage game" , knowing what each player has played in the past. ∈ Assume that the payoff of each player in this larger game is the sum of the payoffsthat he obtains in the stage games. Denote the larger game by . Note that a player simply cares about the sum of his payoffs at the stage games. Most importantly, at the beginning of each repetition each player recalls what each player has 199 200 CHAPTER 12. -
Introduction to Game Theory I
Introduction to Game Theory I Presented To: 2014 Summer REU Penn State Department of Mathematics Presented By: Christopher Griffin [email protected] 1/34 Types of Game Theory GAME THEORY Classical Game Combinatorial Dynamic Game Evolutionary Other Topics in Theory Game Theory Theory Game Theory Game Theory No time, doesn't contain differential equations Notion of time, may contain differential equations Games with finite or Games with no Games with time. Modeling population Experimental / infinite strategy space, chance. dynamics under Behavioral Game but no time. Games with motion or competition Theory Generally two player a dynamic component. Games with probability strategic games Modeling the evolution Voting Theory (either induced by the played on boards. Examples: of strategies in a player or the game). Optimal play in a dog population. Examples: Moves change the fight. Chasing your Determining why Games with coalitions structure of a game brother across a room. Examples: altruism is present in or negotiations. board. The evolution of human society. behaviors in a group of Examples: Examples: animals. Determining if there's Poker, Strategic Chess, Checkers, Go, a fair voting system. Military Decision Nim. Equilibrium of human Making, Negotiations. behavior in social networks. 2/34 Games Against the House The games we often see on television fall into this category. TV Game Shows (that do not pit players against each other in knowledge tests) often require a single player (who is, in a sense, playing against The House) to make a decision that will affect only his life. Prize is Behind: 1 2 3 Choose Door: 1 2 3 1 2 3 1 2 3 Switch: Y N Y N Y N Y N Y N Y N Y N Y N Y N Win/Lose: L W W L W L W L L W W L W L W L L W The Monty Hall Problem Other games against the house: • Blackjack • The Price is Right 3/34 Assumptions of Multi-Player Games 1. -
What Is Local Optimality in Nonconvex-Nonconcave Minimax Optimization?
What is Local Optimality in Nonconvex-Nonconcave Minimax Optimization? Chi Jin Praneeth Netrapalli University of California, Berkeley Microsoft Research, India [email protected] [email protected] Michael I. Jordan University of California, Berkeley [email protected] August 18, 2020 Abstract Minimax optimization has found extensive application in modern machine learning, in settings such as generative adversarial networks (GANs), adversarial training and multi-agent reinforcement learning. As most of these applications involve continuous nonconvex-nonconcave formulations, a very basic question arises—“what is a proper definition of local optima?” Most previous work answers this question using classical notions of equilibria from simultaneous games, where the min-player and the max-player act simultaneously. In contrast, most applications in machine learning, including GANs and adversarial training, correspond to sequential games, where the order of which player acts first is crucial (since minimax is in general not equal to maximin due to the nonconvex-nonconcave nature of the problems). The main contribution of this paper is to propose a proper mathematical definition of local optimality for this sequential setting—local minimax—as well as to present its properties and existence results. Finally, we establish a strong connection to a basic local search algorithm—gradient descent ascent (GDA)—under mild conditions, all stable limit points of GDA are exactly local minimax points up to some degenerate points. 1 Introduction arXiv:1902.00618v3 [cs.LG] 15 Aug 2020 Minimax optimization refers to problems of two agents—one agent tries to minimize the payoff function f : X × Y ! R while the other agent tries to maximize it. -
MS&E 246: Lecture 3 Pure Strategy Nash Equilibrium
MS&E 246: Lecture 3 Pure strategy Nash equilibrium Ramesh Johari January 16, 2007 Outline • Best response and pure strategy Nash equilibrium • Relation to other equilibrium notions • Examples • Bertrand competition Best response set Best response set for player n to s-n: R (s ) = arg max Π (s , s ) n -n sn ∈ Sn n n -n [ Note: arg maxx ∈ X f(x) is the set of x that maximize f(x) ] Nash equilibrium Given: N-player game A vector s = (s1, …, sN) is a (pure strategy) Nash equilibrium if: si ∈ Ri(s-i) for all players i. Each individual plays a best response to the others. Nash equilibrium Pure strategy Nash equilibrium is robust to unilateral deviations One of the hardest questions in game theory: How do players know to play a Nash equilibrium? Example: Prisoner’s dilemma Recall the routing game: AT&T near far near (-4,-4) (-1,-5) MCI far (-5,-1) (-2,-2) Example: Prisoner’s dilemma Here (near,near) is the unique (pure strategy) NE: AT&T near far near (-4,-4) (-1,-5) MCI far (-5,-1) (-2,-2) Summary of relationships Given a game: • Any DSE also survives ISD, and is a NE. (DSE = dominant strategy equilibrium; ISD = iterated strict dominance) Example: bidding game Recall the bidding game from lecture 1: Player 2’s bid $0 $1 $2 $3 $4 $0 $4.00 $4.00 $4.00 $4.00 $4.00 $1 $11.00 $7.00 $5.67 $5.00 $4.60 $2 $10.00 $7.33 $6.00 $5.20 $4.67 Player 1’s bid $3 $9.00 $7.00 $5.80 $5.00 $4.43 $4 $8.00 $6.40 $5.33 $4.57 $4.00 Example: bidding game Here (2,2) is the unique (pure strategy) NE: Player 2’s bid $0 $1 $2 $3 $4 $0 $4.00 $4.00 $4.00 $4.00 $4.00 $1 $11.00 $7.00 $5.67 $5.00 $4.60 $2 $10.00 $7.33 $6.00 $5.20 $4.67 Player 1’s bid $3 $9.00 $7.00 $5.80 $5.00 $4.43 $4 $8.00 $6.40 $5.33 $4.57 $4.00 Summary of relationships Given a game: • Any DSE also survives ISD, and is a NE. -
Solution Concepts in Cooperative Game Theory
1 A. Stolwijk Solution Concepts in Cooperative Game Theory Master’s Thesis, defended on October 12, 2010 Thesis Advisor: dr. F.M. Spieksma Mathematisch Instituut, Universiteit Leiden 2 Contents 1 Introduction 7 1.1 BackgroundandAims ................................. 7 1.2 Outline .......................................... 8 2 The Model: Some Basic Concepts 9 2.1 CharacteristicFunction .............................. ... 9 2.2 Solution Space: Transferable and Non-Transferable Utilities . .......... 11 2.3 EquivalencebetweenGames. ... 12 2.4 PropertiesofSolutions............................... ... 14 3 Comparing Imputations 15 3.1 StrongDomination................................... 15 3.1.1 Properties of Strong Domination . 17 3.2 WeakDomination .................................... 19 3.2.1 Properties of Weak Domination . 20 3.3 DualDomination..................................... 22 3.3.1 Properties of Dual Domination . 23 4 The Core 25 4.1 TheCore ......................................... 25 4.2 TheDualCore ...................................... 27 4.2.1 ComparingtheCorewiththeDualCore. 29 4.2.2 Strong ǫ-Core................................... 30 5 Nash Equilibria 33 5.1 Strict Nash Equilibria . 33 5.2 Weak Nash Equilibria . 36 3 4 CONTENTS 6 Stable Sets 39 6.1 DefinitionofStableSets ............................... .. 39 6.2 Stability in A′ ....................................... 40 6.3 ConstructionofStronglyStableSets . ...... 41 6.3.1 Explanation of the Strongly Stable Set: The Standard of Behavior in the 3-personzero-sumgame ............................ -
Nash Equilibrium
Nash Equilibrium u A game consists of – a set of players – a set of strategies for each player – A mapping from set of strategies to a set of payoffs, one for each player N.E.: A Set of strategies form a NE if, for player i, the strategy chosen by i maximises i’s payoff, given the strategies chosen by all other players u NE is the set of strategies from which no player has an incentive to unilaterally deviate u NE is the central concept of non- cooperative game theory I.e. situtations in which binding agreements are not possible Example Player 2 C D C (10,10) (0,20) This is the Player 1 game’s D (20,0) (1,1) payoff matrix. Player A’s payoff is shown first. Player B’s payoff is shown second. NE: (DD) = (1,1) Another Example…. Player B L R U (3,9) (1,8) Player A D (0,0) (2,1) Two Nash equilibria: (U,L) = (3,9) (D,R) = (2,1) Applying the NE Concept Modelling Short Run ‘Conduct’ Bertrand Competition Cournot Competition [Building blocks in modeling the intensity of competition in an industry in the short run] p pmonop P(N))? C N Bertrand Price Competition u What if firms compete using only price-setting strategies,? u Games in which firms use only price strategies and play simultaneously are Bertrand games. Bertrand Games (1883) 1. 2 players, firms i and j 2. Bertrand Strategy - All firms simultaneously set their prices. 3. Homogenous product 4. Perfect Information 5. Each firm’s marginal production cost is constant at c.