Please enable JavaScript.
Coggle requires JavaScript to display documents.
Game Theory, Game Theory - Coggle Diagram
Game Theory
-
Form of games
Backward Induction
Extensive form games are particularly useful for analyzing sequential games and applying backward induction, a method for finding optimal strategies by working backward from the end of the game.
-
Extensive
-
It shows the order of moves—who goes first, what each player can do, and what happens after each move.
-
Normal
-
It shows the players, the choices (strategies) they can make, and what each player gets (payoff) for every combination of choices.
-
The 2/3 Game
-
The average of all guesses is calculated, and then 2/3 of that average is determined.
-
Game theory
Game theory provides a robust framework for understanding and modeling strategic interactions in AI.
AI systems can make informed decisions in competitive and cooperative environments, leading to more effective and adaptive behaviors.
concept
-
-
-
Games: The overall situation—can be cooperative or competitive, one-time or repeated
-
John Forbes NashHe was an American mathematician who made fundamental contributions to game theory, real algebraic geometry 
Nash Equilibrium
Nash equilibrium is a cornerstone of game theory, providing insights into strategic decision-making in competitive environments.
Mutual Assured Destruction
Mutual Assured Destruction is a military and strategic doctrine where two opposing sides (usually nuclear powers) both possess enough nuclear weapons to completely destroy each other.
Hawk DoveThe Hawk-Dove game was introduced by John Maynard Smith in the 1970s as part of evolutionary game theory
Explain animal behavior using strategies shaped by natural selection rather than conscious decision-making.
Hawk strategy
-
-
Risky, but potentially high reward
Dove strategy
-
If opponent fights (plays Hawk), retreat
If opponent doesn’t fight (plays Dove), share or try to win without fighting
Applications
Business and Economics
Pricing strategy
EX: Two competing coffee shops in the same area must decide how much to charge. If one lowers prices, the other may lose customers. They must choose prices strategically based on what the other might do.
Stock market
Trending strategy
Ex: If big investors think a stock will rise and others will follow, they may buy early. But if everyone thinks that, prices rise too fast, leading to bubbles.
Von Neumann 1944
Mixed strategy equilibrium
A mixed strategy equilibrium occurs when players randomize over their available strategies, assigning probabilities to each strategy rather than choosing a single one. This allows players to keep their opponents uncertain about their actions, which can be advantageous in certain strategic situations.
-
-
-
Monty Hall ProblemThe Monty Hall problem is a famous probability puzzle based on a game show scenario.
Probability of winning
Pareto optimality
Pareto optimality refers to a situation in which no player’s outcome can be improved without reducing the outcome for at least one other player
-