Lecture 1 Game Theory
Lecture 1 Game Theory
A game with two players, where a gain of one player equals a loss
to the other is called a two-person zero sum game.
Player B Player B
𝐵1 𝐵2 𝐵3 𝐵1 𝐵2 … 𝐵𝑛
𝐴1 𝑎11 𝑎12 … 𝑎1𝑛
𝐴1 −20 −12 4
𝐴2 𝑎21 𝑎22 … 𝑎2𝑛
Player A 𝐴2 24 −16 −4 . . . … .
𝐴3 12 14 4 Player A . . … .
.
. . . … .
𝐴𝑚 𝑎𝑚1 𝑎𝑚2 … 𝑎𝑚𝑛
Assumption of the Game
The decisions of both players are made individually prior to the play
Pure Strategies : Games with Saddle Point
The players must select their respective strategies so that they may
Optimize their payoff.
Decision making criterion is referred to as the minimax-maximin
principle.
Such principle gives the best possible selection of a strategy for both
players.
Select the maximum element of each column of the payoff matrix and
enclose it in
Find out the element which has both & . This element
represents the value of the game and is called Saddle Point.
1ST Method Player B
𝐁𝟏 𝐁𝟐 𝐁𝟑
1 Solve the following game.
Player A
𝐀𝟏
𝐀𝟐
15
6
2
5
3
7
Answer: 𝐀𝟑 -7 4 0
Player B Row
Minimum Here,
𝐁𝟏 𝐁𝟐 𝐁𝟑
𝐀𝟏 15 2 3 2 From Row Minimum we find Maximum Value
i.e., Maxi-Min=5
Player A 𝐀𝟐 6 5 7 5
and
𝐀𝟑 -7 4 0 -7
From Column Maximum we find Minimum Value
Column 15 5 7 i.e., Mini-Max=5
Maximum
Column 4 2 0 4 5
Maximum
𝑴𝒂𝒙𝒊. 𝒎𝒊𝒏 = 𝑴𝒊𝒏𝒊. 𝒎𝒂𝒙 = 𝟎
Saddle point is at 𝑨𝟐 , 𝑩𝟑 & Value of the game is 0 (The Game is Fair)