Types of Games in Game Theory
Game theory is a branch of applied mathematics used in the social sciences, most notably economics. Game theory models decision is behavior based on the choices of others.
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Game Types
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Games studied in game theory are categorized in several ways: Whether an equilibrium strategy exists, whether players know other players' previous moves, whether players' decisions are simultaneous or sequential, and whether they are zero sum.
Rock, Paper, Scissors
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This well-known hand game is a trivial example of a zero-sum game (one player wins, one loses) requiring simultaneous decisions. There is no equilibrium strategy because the set of winning solutions cannot be narrowed.
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Prisoner's Dilemma
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Two suspects get set free for being the only one to incriminate the other, full sentences for being incriminated by the other, reduced sentences if both incriminate the other, and minimal sentences if both remain silent. The only equilibrium solution is for the first prisoner to betray the second because for each choice the second makes, betrayal gives the first greater reward.
Chicken
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A player wins more for not yielding before the other, but both lose everything if neither yields.
The Cake-Cutting Problem
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In dividing resources such as a cake, the two-player solution is for one to cut the cake and the other chooses which piece to take.
Traveler's Dilemma
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Identical luggage of two travelers is lost. The airline will reimburse in such a way to encourage the travelers to underbid each other on the reimbursement. The rational solution is much smaller (less enriching) than that selected by actual test subjects, suggesting a weakness in some game-theory solution methodology.
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