Oriental Daily (B) Peter(B) Cut Don't Confess Don' price(C)cut (D) (C) Confess (D) Cut 10,10 30,5 Confess 5,3 0,10 .Player A:(C.D)>(D.D)>(C.C)>(D.C) Apple C Daily John Don't (A) Don't .Player B (D.C)>(D.D)>(C.C)>(C.D) (A) 5,30 20,20 Confess cut (D) 10,0 22 (D) If we can analyze what A and B are going to choose based on the above information,then we can apply the In both examples,based on the payoffs,A and result to both of the examples. B have the same preferences of the outcomes. We shall see later that both A and B will choose C even Player A (C D)>(D,D)>(C C)>(D,C though they can have a better outcome (D,D)>(C.C). Player B:(D,C)>(D,D)>(C C)>(C D) What is a Game? Four Elements of a Game 1.The number of players. The previous two situations are the examples of the games considered in Game 2.A complete description of the possible Theory. strategies of each player We shall only focus on those games with -when each player moves,what are the the following information. possible moves?what is known to each player before moving? Dating Game Four Elements of a Game Ross and Rachel would like 3.A description of the outcome of the to go out on Friday night. moves. Ross prefers to see football, while Rachel prefers to 4.Payoff of each possible outcome have a drink. -how much money each player receive However,they would rather for any specific outcome. go out together than alone. 55 y In both examples, based on the payoffs, A and B have the same preferences of the outcomes. y Player A : (C, D) > (D, D) > (C, C) > (D, C) y Player B : (D, C) > (D, D) > (C, C) > (C, D) 10,0 2,2 Don’t Confess (D) 5,5 0,10 Confess (C) John (A) Don’t Confess (D) Confess (C) Peter (B) 5,30 20,20 Don’t cut (D) 10,10 30,5 Cut price (C) Apple Daily (A) Don’t cut (D) Cut price(C) Oriental Daily (B) y Player A : (C, D) > (D, D) > (C, C) > (D, C) y Player B : (D, C) > (D, D) > (C, C) > (C, D) y If we can analyze what A and B are going to choose based on the above information, then we can apply the result to both of the examples. y We shall see later that both A and B will choose C even though they can have a better outcome (D,D) > (C,C). „ The previous two situations are the examples of the games considered in Game Theory. „ We shall only focus on those games with the following information. What is a Game? 1. The number of players. 2. A complete description of the possible strategies of each player. - when each player moves, what are the possible moves? what is known to each player before moving? Four Elements of a Game Four Elements of a Game 3. A description of the outcome of the moves. 4. Payoff of each possible outcome - how much money each player receive for any specific outcome. Dating Game Ross and Rachel would like to go out on Friday night. Ross prefers to see football, while Rachel prefers to have a drink. However,they would rather go out together than alone