Introduction to Game Theory

1. Introduction to Game Theory

Introduction to Game Theory

2. What is a Game?

• An attempt to achieve one’s goal in an
environment with others.
• Players act rationally.
• Goals can align or conflict.
• Strategy matters.

3. Basic Unit: Two-Player Game

• SR = strategies of Ruth (Row)
• SC = strategies of Charlie (Column)
• ΠR, ΠC = payoff functions
• Outcome depends on combined strategies

4. Zero-Sum Games

• ΠR = −ΠC for all strategies
• One’s gain is the other’s loss
• Examples: Had and Tail

5.

6. Symmetric Games

• Same strategies for both players
• ΠR(s1, s2) = ΠC(s2, s1)
• Example: Rock–Paper–Scissors

7.

8. Prisoner's Dilemma

• Individual rationality → confess
• Collective rationality → stay silent
• Dilemma: cooperation vs betrayal