A Study Note of Game Theory.1

An introduction to game theory.

Games Theory

1. Game theory is a bag of analytical tools designed to help us understand the phenomena that we observe when decision-makers interact.

Games and Solutions

1. A game is a description of strategic interaction that includes the constraints on the actions that the players can take and the players’ interests, but does not specify the actions that the players do take.
   1. strategic games: a model of a situation in which each player chooses his plan of action once and for all, and all players’ decisions are made simultaneously
   2. extensive games: specify the possible orders of events; each player can consider his plan of action not only at the beginning of the game but also whenever he has to make a decision
      1. with perfect information: each player is fully informed about others’ moves
      2. without perfect information: each player is not fully informed about others’ moves
   3. coalitional games
2. A player is the basic entity of all game theoretic models. A player may be interpreted as an individual or as a group of individuals making a decision.
   1. individual players -> noncooperative
   2. groups of players -> cooperative
3. Mathematical notations