Lecture Notes: Algorithmic Game Theory Palash Dey Indian Institute of Technology, Kharagpur
[email protected] Copyright ©2020 Palash Dey. This work is licensed under a Creative Commons License (http://creativecommons.org/licenses/by-nc-sa/4.0/). Free distribution is strongly encouraged; commercial distribution is expressly forbidden. See https://cse.iitkgp.ac.in/~palash/ for the most recent revision. Statutory warning: This is a draft version and may contain errors. If you find any error, please send an email to the author. 2 Notation: B N = f0, 1, 2, ...g : the set of natural numbers B R: the set of real numbers B Z: the set of integers X B For a set X, we denote its power set by 2 . B For an integer `, we denote the set f1, 2, . , `g by [`]. 3 4 Contents I Game Theory9 1 Introduction to Non-cooperative Game Theory 11 1.1 Normal Form Game.......................................... 12 1.2 Big Assumptions of Game Theory.................................. 13 1.2.1 Utility............................................. 13 1.2.2 Rationality (aka Selfishness)................................. 13 1.2.3 Intelligence.......................................... 13 1.2.4 Common Knowledge..................................... 13 1.3 Examples of Normal Form Games.................................. 14 2 Solution Concepts of Non-cooperative Game Theory 17 2.1 Dominant Strategy Equilibrium................................... 17 2.2 Nash Equilibrium........................................... 19 3 Matrix Games 23 3.1 Security: the Maxmin Concept.................................... 23 3.2 Minimax Theorem.......................................... 25 3.3 Application of Matrix Games: Yao’s Lemma............................. 29 3.3.1 View of Randomized Algorithm as Distribution over Deterministic Algorithms..... 29 3.3.2 Yao’s Lemma........................................