An Introduction to Game Theory

Presented as an undergraduate class in

Multimedia Mathematics

Paul Trafford
[email protected]
6 July 2011
PART A: Basic Concepts

2
 Let’s Play a Game!
Description: Bank has up to £1,000 to give away to the
person or persons who choose the highest number.
Players: Each individual student or group.
Objective: To win as much as possible. 
Rules.
1. No communication between the players
2. Choose a number N >= 1 and write it down
on a piece of paper along with student/group name.
3. The student(s) who chooses max. value of N wins
total of £1,000/N

3
 Let’s Play the Game Again!
Description: Bank has up to £1,000 to give away to the
person or persons who choose the highest number.
Players: Each individual student or group.
Objective: To win as much as possible. 
Rules.
1. Communication allowed between the players
2. Choose a number N >= 1 and write it down
on a piece of paper along with student/group name.
3. The student(s) who chooses max. value of N wins
total of £1,000/N

4
 What is Game Theory?
Definition of Game Theory
• The analysis of competitive situations (or situations of
conflict) using mathematical models

Essential Terminology
• The way a game is played depends on strategy – a plan
of action before the game begins.
• A solution is the adoption of a strategy that yields a
particular outcome.

Compare “solving” environmental problems with

“solving” an equation.
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 Characteristics of Game Theory
What is it about?
• Fundamentally about the study of decision-making
• Investigations are concerned more with choices and
strategies than ‘best’ solutions.

It seeks to answer the questions:

i. What strategies are there?
ii. What kinds of solutions are there?

Examples:
• Chess, Go, economic markets, politics, elections, family
relationships, etc.

6
 History (1)
The study of games is many centuries old. More
systematic developments in Game Theory took
place in the first half of the 20th Century.

Main Founders
John Von Neumann (mathematician)

Oskar Morgenstern (economist)

Image sources: Los Alamos National Laboratory, http://www.lanl.gov/history/atomicbomb/images/NeumannL.GIF
and American Mathematical Society, http://www.ams.org/samplings/feature-column/fcarc-rationality

7
 History (2)
Main publication: von Neumann & Morgenstern: Theory
of Games and Economic Behaviour. Princeton University
Press, 1944.
Goal:
• Application of mathematical methods to broadly
analyse games
• A new scientific approach to the study of economics.
Applications:
• Aided by computers, theory has been broadly applied
in large-scale operations such as international trade.

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 Game Theory is inter-disciplinary

Psychology

Mathematics

Game Theory
Economics

9
 What makes a Game?
Elements in a Game
• One or more players – participants, each may be an
individual, a group or organisation, a machine, and so on.
• One or more moves (or choices) – where a move is an
action carried out during the game, including chance
moves (when “nature plays a hand”) as in the toss of a coin.
• A set of outcomes – where an outcome is the result of the
completion of one or more moves
[e.g. game of chess may end in checkmate or a draw]
• Payoff – an amount received for a given outcome.
• Finally, a set of rules which specify the conditions for the
players, moves, outcomes and payoffs.

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 Strategy
How should one play the game?
Definition: A strategy is a plan of action by which
a player has a decision rule to determine their set of
moves for every possible situation in a game.
• A strategy is said to be pure if it at every stage in the
game it specifies a particular move with complete
certainty.
• A strategy is said to be mixed if it applies some
randomisation to at least one of the moves.
For each game, there are typically multiple pure
strategies. Note that the randomisation is a set of fixed
probabilities, where the sum of the probabilities is 1.

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 Strategy: Travel Example
In this ‘game’ a ‘player’ is a commuter who is returning
home from work – their objective is to return home as
soon as possible. They can choose between train, bus
and subway
The first choice is ‘catch the train’, the second choice is
‘catch the bus’ and so on.
• A commuter who always chooses to catch the train
is following a ‘pure’ strategy.
• A commuter who sometimes picks the train and
sometimes the bus is following a ‘mixed’ strategy.
Question: is this a one player game?
Photo credit: Nyao148 : Mejiro railway station http://en.wikipedia.org/wiki/File:Mejiro-Sta.JPG

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 Types of Games (1): Co-operative vs.
Non co-operative Games
Our first game (slide 2): non-cooperative
Our second game (slide 3): cooperative
Cooperation generally may lead to higher payoffs.
Further Examples:
• Countries cooperate on trade (reduced tariffs) leading
to boost in exports
• Two leading national social networking sites share
technical knowledge and keep out an overseas
competitor.
• Cartel: formation of monopoly by multiple
organisations.
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 Types of Games (2): Perfect vs.
Imperfection Information
A game is said to have perfect Information if all the
moves of the game are known to the players when they
make their move. Otherwise, the game has imperfect
information.
A large class of games of imperfect information are
simultaneous games - games in which all players make
their moves at the same time without knowing what the
others will play. (The decisions may be made beforehand,
but are not communicated).
A game is said to be deterministic – if there are no
chance moves. Otherwise, the game is non-deterministic.

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 A selection of games

Photo credits: Morten Johannes Ervik [Go], Jose Daniel Martinez [Chess], William Hartz (Scrabble), David ten
Have (Ludo), WikiJET (Janken), Cyron Ray Macey (Tic Tac Toe), Dayland Shannon (Monopoly), Denise Griffin
(Bridge), Steve Snodgrass (Draughts)
15
 How to classify?
There are a number of [orthogonal] criteria that
may be used as the basis for classifying games.
A common one uses two: im/perfect
information and chance/not chance.

Perfect Information Imperfect Information

Non-deterministic
(Chance moves)
? ?
Deterministic
(No chance moves)
? ?
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Classification of games:
Perfect Information Imperfect Information

Chance
Moves

No chance
moves

Photo credits: Morten Johannes Ervik [Go], Jose Daniel Martinez [Chess], William Hartz (Scrabble), David ten Have (Ludo), WikiJET
(Janken), Cyron Ray Macey (Tic Tac Toe), Dayland Shannon (Monopoly), Denise Griffin (Bridge), Steve Snodgrass (Draughts)
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 Zero vs. Non-Zero-Sum Games
One of the most important classifications .
A game is said to be zero-sum if wealth is neither
created nor destroyed among the players.
A game is said to be non-zero-sum if wealth may be
created or destroyed among the players (i.e. the
total wealth can increase or decrease).
All examples above are zero-sum because they are
competitive leisure games. However, most real-life
situations are non-zero-sum (as indicated, for
example, by how economies can grow).
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PART B: Zero-Sum Games and
Extended Form

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1- Person Game: Tomato Plants (1)
There are many 1 person games – including popular
card games called ‘Patience’. They are instructive in
decision-making.
Example: Growing tomato plants…!

Photo credit: Manjith Kainickara http://www.fotopedia.com/items/flickr-1061718736

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1- Person Game: Tomato Plants (2)
Objective: Grow a healthy tomato plant!
Rules.
1. One must make at least one move – plant a seed.
2. Afterwards, one can make any number of moves:
Player’s Moves Chance Moves

• Water plant • It rains

• Add fertiliser • It is stormy (heavy rain and wind)
• Communicate with plant • It is sunny
• Place in sunlight • There is frost
• Shelter plant

Photo credit: Manjith Kainickara http://www.fotopedia.com/items/flickr-1061718736

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1- Person Game: Tomato Plants (3)
Outcomes Payoffs
• Plant doesn’t grow • Big ripe Tomatoes
• Plant grows, but has no • Small ripe tomatoes
fruit • No tomatoes
• Plant grows, but has sour • … etc.
fruit

How to Model?

Photo credit: Manjith Kainickara http://www.fotopedia.com/items/flickr-1061718736

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 2- Person Game: Simple Nim
(Also called the ‘subtraction game’)

Rules
• Two players take turns removing objects from a single
heap or pile of objects.
• On each turn, a player must remove exactly one or two
objects.
• The winner is the one who takes the last object
Demonstration: http://education.jlab.org/nim/index.html

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Simplified Nim: winning strategy: proof
Lemma: Suppose that Players A and B are playing the Nim
subtraction game where at each move a player can remove
between 1 and c counters, then a player has a winning
strategy if they can play a move that leaves k(c+1) counters.

Proof
We prove this for Player A
(1) Base Case (k=1):
Suppose A leaves c+1 counters, then B has to choose to
remove x:1≤x≤c.
This implies that there are y = c+1-x left, where 1 ≤ y ≤ c.
Then A chooses y and wins.

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 Simplified Nim: proof (2)
(2) Inductive step:
Assume the statement is true for k=n (n≥1).
I.e. if Player A leaves n(c+1) , then player A wins.
Suppose A leaves (n+1)(c+1) counters left, i.e. nc+n+c+1
If B chooses x:1≤x≤c, this leaves nc+n+c+1-x.
Then A chooses c+1-x, leaving n(c+1).
(3) Completion of proof by induction:
Thus if the case k=n is true, then so is the case k=n+1
We have the base case k=1, is true, so the statement is
true for k=2,3,… and so on.
The Lemma is thus proved by induction for all values of k.
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 Simple Nim: Another go?

Rules
• Two players take turns removing objects from a single heap
or pile of objects.
• On each turn, a player must remove exactly one or two
objects.
• The winner is the one who takes the last object
Strategy
• Leave a multiple of 3.
Demonstration: http://education.jlab.org/nim/index.html

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 2- Person Game: Traditional Nim
(General form)
Rules
Two players take turns removing objects from distinct heaps
or piles of objects. On each turn, a player must remove at
least one object, and may remove any number of objects
provided they all come from the same heap.
Strategy:
“To find out which move to make, let X be the Nim-sum of all
the heap sizes. Take the Nim-sum of each of the heap sizes
with X, and find a heap whose size decreases. The winning
strategy is to play in such a heap, reducing that heap to the
Nim-sum of its original size with X.”
- Wikipedia entry 6/2011

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 Games in Extensive Form: Modelling
by Trees
We may model how the set of states in a game by using a
tree with nodes and edges – called extensive form.

Gambit is a set of software tools for

doing computation on finite,
non-cooperative games.
It provides tree representations.

Project founded in the mid-1980s by Richard McKelvey at

the California Institute of Technology, USA.

[ Gambit Web site: http://www.gambit-project.org/ ]

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Gambit Example: Tree for Nim (2,2)
We may model how the set of states in a game by using
a tree with nodes and edges. E.g. (2,2) game:

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PART C: Zero-Sum Games in
Normal Form

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Introducing 2 person games in Normal
Form
We represent the players by Player A and Player B
(or simply A and B) and denote the moves they can
make as A1, A2, …, An and B1, B2, …, Bm
respectively. These moves are made
simultaneously, so these are games of imperfect
information.
We represent the game in normal form, i.e. using
payoff matrices, where the value of each cell (i,j) is
the payoff corresponding to the moves Ai and Bj
respectively.

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 Normal Form: example of 2*2 game
In the following example, we treat the special case where each player
has 2 moves.
B1 B2
A1 2 0
A2 4 -2
(Note the payoffs are the values that will be given to Player A)
Each row or column of payoffs is called an imputation.
Player A has two moves: A1 and A2.
Player B has two moves: B1 and B2.
The payoff for a game is given by the intersection. Thus if the moves
are respectively A1 and B2, then the payoff is zero.

32
 Solutions of 2 person games
A solution is expressed as a set of strategies for all players that yields a
particular payoff, generally the optimal payoff for both players. This
payoff is called the value of the game.
Suppose, for example, each player adopts the strategy of choosing the
move whose imputation contains the cell with the maximum payoff.
B1 B2
A1 2 0
A2 4 -2

Here, player A picks A2 as it contains a ‘4’, whereas player B selects B2

as it contains -2. This would yield 2 for player B.
However, this is not a solution as it is not optimal for player A – they
could always do better by playing A1. So the value of the game is >-2.

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 The Concept of Equilibrium (Pure
Strategies) 1/2
So what strategies may yield optimal payoffs for both?
Key concept: In an equilibrium, each player of the game
has adopted a strategy that cannot improve his
outcome, given the others' strategy. The method for this
is:
• Player A considers each imputation and what is the
least payoff value that may be gained by choosing that
imputation.
• Similarly, Player B considers each imputation and what
is the greatest payoff value that may be gained by
choosing that imputation.

34
The Concept of Equilibrium (Pure
Strategies) 2/2

B1 B2 vL
A1 1 4 1
A2 3 2 2*
vM 3* 4

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 The Concept of Equilibrium (Pure
Strategies): Saddle Points
In the case that the value of the
game is vL = vM , a saddle point
is any cell whose payoff is this
value.
Example
Playing A1 => payoff of at least 0 B1 B2 vL
Playing B2 => payoff of no more than 0
There is a unique saddle point – cell (A1,B2). A1 2 0 0*
If either player deviates from this, then they will A2 4 -2 -2
do worse.
Here, vL = vM = 0. vM 4 0*

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 When there is no Saddle Point
Consider again the following payoff matrix:
B1 B2
A1 1 4
A2 3 2
We have seen above that the value of the game lies between 2 and 3.
But, if player A always plays A2, then B can always play B2 and the payoff is 2,
whereas is player A always plays A1, then B1 can always play B1, yielding 1,
which is less than 2!
Can player A gain more than 2…?
Yes, because the game is of imperfect information – players don’t know each
other’s move, but this means that we should not be predictable.

37
 Simplification using Dominance
For larger matrices, we may often simplify.
B1 B2 B3 B4 B5
A1 4 5 6 1 5
A2 4 3 5 3 4
The main technique for simplification is to compare pairs of columns, C
and C’, say, and delete those columns where the payoff in C is always
greater than that in C’ or vice versa. In this case we say C dominates
C’. (Similarly for rows).

Thus, B4 dominates B1, B3 and B5, yielding : B2 B4

This matrix yields a saddle point A1 5 1
corresponding to the moves A2 and B4,
with value of the game=3. A2 3 3*

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Simplification using Dominance:
Demonstration in Gambit

39
 Mixed Strategies: Expectation 1/2
Scenario: Game is played repeatedly. In this case choosing
the same pure strategy is not always optimal, so we can vary
these pure strategies.
To determine how we vary the strategies, we can apply
probability theory.
Key concept is Expectation := the product of the probability of
the occurrence of an event and the value associated with the
occurrence of a given event.
A player can use a mixed strategy – this is more than one pure
strategy, where each pure strategy is played randomly
according to a fixed probability yielding an expected payoff.
40
Mixed Strategies: Expectation 1/2

41
Mixed Strategies: Expectation:
Examples
B1 B2
A1 1 4
A2 3 2

42
Minimax: The Concept of Equilibrium
for Mixed Strategies

43
Minimax: Determination of the Mixed
Strategies
Determination of x and y
• Determine if there are any saddle points. If found
then we have the solution and can stop here.
• Remove all dominated imputations
(rows/columns), leaving a payoff matrix M.
• For the two players, solve Mx = v and MTy = v
respectively, where v is a vector where each entry
is v, the value of the game. (MT is the transpose
of M)
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Minimax Example (1/4)
B1 B2
A1 1 4
A2 3 2

45
 Minimax Example (2/4): Player A’s
mixed strategy
Let x:= the probability Player A plays A1 B1 B2
Let y:= the probability Player A plays A1 A1 1 4
Then x+y=1. A2 3 2

(1) 1*x + 3*y = v

(2) 4*x + 2*y = v

Therefore, from (1), x=v-3y. Substitute in (2) to give:

4(v-3y)+2y=v. Therefore, 3v=10y.
Hence, 3x = 3(v-3y) = 10y-9y = y.
Therefore x=0.25, y=0.75 and v=2.5

46
 Minimax: Example (3/4): Player B’s
mixed strategy
Hence, for player B: B1 B2
A1 1 4
Let x’:= the probability Player B plays B1
Let y’:= the probability Player B plays B1 A2 3 2

Then x’+y’ = 1.
(1) 1*x’ + 4* y’ = 2.5
(2) 3*x’ + 2* y’ = 2.5
Therefore, 3(2.5-4y’)+2y’ = 2.5
Hence, 5 = 10y’ => y’ = 0.5. Therefore x’ = 0.5

47
 Minimax Example (4/4) – use of
Gambit
Gambit provides modelling of games in normal form – Gambit calls
them “strategic games”.

In the screenshot, each cell has a pair of payoffs - the first is what
Player A receives, the second is what Player B receives. (Gambit is
designed for non-zero-sum games – see later sections).
It can compute the expected value and the corresponding equilibria
mixed strategies of the two players.

48
 Minimax Limitations
Whilst the Minimax theorem provides a solution, it’s macro-
oriented, i.e. not sensitive to individual variations. Thus
It ensures an average payoff
Assumes repeated play and is a result that is more reliable
the more times played
In practice, it takes no account of the strategy of the
opponent – even if they keep playing the same pure
strategy, the expected return is no more, no less…
The optimisation reflects a collective philosophy that
markets find their natural level.

49
PART D: Non-Zero-Sum Games

50
An Overview of Non-Zero-Sum Games
[Recap] A game is said to be non-zero-sum if wealth may be
created or destroyed among the players (i.e. the total wealth
can increase or decrease).
In general, unlike for zero-sum games, in non-zero-sum games,
wealth can be mutually created through cooperation.
Cooperation may be achieved whether or not there is direct
communication.
• Where there is no communication, information is
necessarily imperfect.
• Where there is communication, there may be bargaining.

51
 Analysis of Non-Zero-Sum Games
Methods of mathematical logical, such as use of induction, are
effective for determining strategies in Zero-sum games with perfect
information. However they are less so for games of imperfect
information, and are often not applicable to non-zero games.
IF some assumptions are made THEN some mathematical techniques
may be effectively applied.
Prerequisites:
• Understand the environment,
• understand the individual and collective psychology
(Thus we are moving from the domain of pure mathematics to
embrace social sciences, particularly psychology and economics.)

52
 Utility
Payoffs are given as utility – the perceived worth of
something
Utility is a key concept and is determined by social and
psychological factors.
• They depend upon personal preferences
• The same material payoff may have different utility

(In economics, personal preference is often reckoned in

terms of ranking a selection of consumer offerings.
*Economic+ agents are said to be “rational” if this ranking
system is complete.)

53
 Utility – Example (Exercise)
Which would you choose?
(Game is only played once!)
1.10 million Yen 100% chance
2.100 million Yen 20% chance

54
 Utility – Example (Analysis)
Expected return option (1) = 10 million yen,
Expected return option (2) = 20 million yen,
But option (1) has already great utility – utility curve may be
logarithmic

Here, if you have many friends playing or many attempts, then you
should go for option 2.

This is similar to philosophy of ‘penny shares’ – small investment,

unlikely to succeed, but if it succeeds then it could be very successful.

55
 Analytical Approaches to Non-Zero-
Sum Games
As before, the mathematical approaches use linear algebra, matrices,
and probability theory.
Hence the basic Concepts in Non-Zero-Sum Games:
• One-off vs Repeated games
• Payoff matrix
• Expectation
• Strategies – pure and mixed

However, the generation of appropriate models requires Social Science

tools that take account of the psychology of human behaviour,
individual and collective; the analysis of markets, negotiation and
bargaining.

56
 Introducing The Prisoner’s Dilemma
Description: Two men suspected of committing a bank robbery together
and are arrested by the police. They are placed in separate cells, so
cannot communicate.

Each suspect may either confess or remain silent. They know the
consequences of their actions. Suppose we call them Player A and
Player B:
If A confesses, but B remains silent, then A “turns Queens Evidence”
[UK] and goes free, whilst the other goes to prison for 10 years
If both A and B confess, then they go to prison for 5 years.
• If both A and B remain silent, then they go to prison for 1 year for
carrying concealed weapons.

57
The Prisoner’s Dilemma: Payoff Matrix
Non-zero-sum games of normal form may be represented by a
payoff matrix, where each cell is an n-tuple, a set of payoffs, 1
for each player. Thus for the Prisoner’s Dilemma, a 2-person
game, we have pairs of payoffs.
If A1 denotes ‘Player A remains silent’, A2 denotes ‘Player A
confesses’ (similarly for B), then we can represent the problem
by the following matrix:
B1 B2
A1 (-1,-1) (-10,0)
A2 (0,-10) (-5,-5)

58
 The Prisoner’s Dilemma: Strategy
Player A reasons as follows:
• If Player B chooses B1, then I am better off choosing A2 (because O > -1).
• If Player B chooses B2, then I am better off choosing A2 (because -5 > -10).
Similarly, for player B. Hence A2,B2 are selected.
In fact, this reflects accepted theory: John Nash extended the minimax result
of zero-sum games to non-zero-sum games. Informally, it states that a pair of
mixed strategies is in Nash equilibrium, if it means that any unilateral (one-
sided) deviation for either player would yield a payoff that was no more than
the value of the pair.
• (A2,B2) are in equilibrium. Payoffs are (-5.-5)

59
 Mixed Strategies for Non-zero-sum
Games: Nash Equilibrium
As mentioned above, John Nash’s theorem states that a pair of mixed
strategies is in equilibrium if any unilateral (one-sided) deviation for either
player would yield a payoff that was no more than the value of the pair.
Formally,
Definition. A pair of strategies, x*∈X, y*∈Y is an equilibrium pair for a non-
zero-sum game if for any x∈X and y∈Y, eA(x,y*) ≤ e(x*,y*) and eB(x*,y) ≤
e(x*,y*) , where eA is player A’s payoff and eB is player B’s payoff.
Theorem. Any two-person (zero-sum or non-zero-sum) with a finite number
of pure strategies has at least one equilibrium pair.
(Such a pair is called a Nash Equilibrium pair. Determining the solution is not
trivial.)

60
 The Prisoner’s Dilemma: Paradox
Paradox: both players confess and spend 5 years in
prison, whereas if they had remained silent they
would have spent 1 year each in prison!
Diagnosis: the unilateral view is not optimal. A
bilateral (two-sided) view – involving cooperation –
would suggest the other move for both players.
This is covered by the notion of strategies being
pareto optimal – when there is no other strategy in
which both players are at least as well off.

61
 The Repeated Prisoner’s Dilemma:
Web demos
There are many online versions of the Prisoner’s
Dilemma.
See e.g.
• Lessons from the Prisoner’s Dilemma: An
interactive tutorial by Martin Poulter, April
2003, Economics Network
http://www.economicsnetwork.ac.uk/archive/poulter/pd.htm

62
 The Prisoner’s Dilemma: Applications
(1)
What is it useful for?
Usefulness usually determined by consideration of repeated
games…
Lessons for military (consider safety of the citizens of two rival
powers: which is safer? If they both disarm (cooperative
strategy)? Or if they are both heavily armed?
Marketing strategies – if two rival companies both offer small
discounts then they may receive many customers and retain a
good market share. What if they offer huge discounts?

63
 The Prisoner’s Dilemma: Applications
(2)
“In economics as in other realms of the prisoner's dilemma, success
requires a willingness not to measure oneself against any one
opponent. ''You do tend to compare yourself to other people,'' Dr.
Hauser said. ''However, it turns out that if I do that I'm hurting myself
very badly.'' Biological Applications”
“In real life, that is, does cooperation depend on an internal sense of
morality? Or does it depend on the complicated dynamics of
environments where people challenge each other, betray each other
and trust each other over and over again?”

NY Times, PRISONER'S DILEMMA HAS UNEXPECTED APPLICATIONS By

JAMES GLEICK Published: June 17, 1986

64
 The Battle of the Sexes
Suppose that a newlywed couple are both
planning an outing at the weekend. They
haven’t yet decided what to do.
The husband would like to watch
football, whereas the wife would like to go to a
concert, but they would both prefer to be in
the company of their spouses rather than go
their separate ways.
Suppose option 1 is football and option 2 is
concert. Then the payoff matrix may look like W1 W2
this: H1 (4,1) (0,0)
H2 (0,0) (1,4)

65
 The Battle of the Sexes: Equilibria
(Gambit)
Gambit can calculate the equilibria and gives 3 of
them:

Two of the three are indicating cooperation

66
 The Battle of the Sexes: Modelling in
Maxima
Maxima can be used to plot regions.
Suppose the husband chooses to play option H1 with probability x.
Therefore they play option H2 with probability 1-x.
Similarly, the wife plays option W1 with probability y and option W2 with
probability 1-y.
We then can define expectation for each player as functions E1 and E2
respectively in variables x and y:
E1:=(4*xy + 0*x(1-y)) + (0*(1-x)y + 1*(1-x)(1-y))
E2:=(1*xy + 0*x(1-y)) + (0*(1-x)y + 4*(1-x)(1-y))
Hence
E1=5xy –x-y+1 and E2= 5xy+-4x-4y+xy

67
 The Battle of the Sexes: Cooperation:
Maxima Graphs 1/2
We can carry out a parametric plot that shows the
expectations along the x-axis and y-axis respectively.
Thus this is actually a 2D plot in two parameters(x,y).
However, Maxima only allows one parameter for 2D
plots. Thus we need to use a 3D plot, and simply set z to
be a constant
E1(x,y):=5xy-4y-4x+4 - think of this as the x-axis
E2(x,y):=5xy-x-y+1 - think of this as the y-axis
Z:=0 – any value will be fine
0<=x<=1, 0<=y<=1

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 The Battle of the Sexes: Cooperation:
Maxima Graphs 2/2
The resulting graph looks like:

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 The Battle of the Sexes: Cooperation:
Maxima Graphs: convex closure 1/2
Here, complete cooperation means that always the
payoffs are either (1,4) or (4,1). There may be some
decision rule that randomises this, e.g. a toss of a
coin. In this case, we simply denote the probability
of the first option by x (0 <= x <=1):
E1:= 4x + 1-x = 1+3x
E2:= x + 4(1-x) = 4-3x
We can plot this on the same graph and compare…
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 The Battle of the Sexes: Cooperation:
Maxima Graphs: convex closure 2/2
The result is simply a straight line joining the points (1,4) and (4,1).

The expected values lie between 1 and 4 for both players.

It pays to cooperate!

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 Conclusions
• Games occur in many life situations
• Mathematical analysis requires understanding
of the context and rules
• Games played repeatedly yield different
responses from games played only once.
• Human psychology often yields unexpected
behaviour.

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