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A Nash equilibrium for a mixed-strategy game is stable if a small change (specifically, an infinitesimal change) in probabilities for one player leads to a situation where two conditions hold: the player who did not change has no better strategy in the new circumstance; the player who did change is now playing with a strictly worse strategy.
The dashed line indicates that player 2 does not know whether player 1 will play A or B in a simultaneous game. Subgame 1 is solved and (3,4) replaces all of Subgame 1 and player one will choose U -> (3,4)Solution for Subgame 1. Player 1 chooses U rather than D because 3 > 2 for Player 1's payoff. The resulting equilibrium is (A, X) → (3,4).
Normal-form game. In game theory, normal form is a description of a game. Unlike extensive form, normal-form representations are not graphical per se, but rather represent the game by way of a matrix. While this approach can be of greater use in identifying strictly dominated strategies and Nash equilibria, some information is lost as compared ...
Induction puzzles are logic puzzles, which are examples of multi-agent reasoning, where the solution evolves along with the principle of induction. [1] [2]A puzzle's scenario always involves multiple players with the same reasoning capability, who go through the same reasoning steps.
Zero-sum game. Zero-sum game is a mathematical representation in game theory and economic theory of a situation that involves two competing entities, where the result is an advantage for one side and an equivalent loss for the other. [1] In other words, player one's gain is equivalent to player two's loss, with the result that the net ...
Repeated game. In game theory, a repeated game (or iterated game) is an extensive form game that consists of a number of repetitions of some base game (called a stage game). The stage game is usually one of the well-studied 2-person games. Repeated games capture the idea that a player will have to take into account the impact of their current ...
v. t. e. In economics, specifically general equilibrium theory, a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. In theoretical models where conditions of perfect competition hold, it has been demonstrated that a market will reach ...
In game theory, an extensive-form game is a specification of a game allowing (as the name suggests) for the explicit representation of a number of key aspects, like the sequencing of players' possible moves, their choices at every decision point, the (possibly imperfect) information each player has about the other player's moves when they make a decision, and their payoffs for all possible ...