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Rock Paper Scissors

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Karuna Gowda
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41 views5 pages

Rock Paper Scissors

Uploaded by

Karuna Gowda
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Rock-Paper-Scissor’s Game:

• Rock-paper-scissors is a classic example of a non-cooperative game in game theory,


often used to illustrate the concept of a mixed strategy Nash equilibrium.
• Rock-paper-scissors is a classic example used in game theory to illustrate concepts
such as strategic decision-making, mixed strategies, and Nash equilibrium.

Below, we'll delve deeper into these aspects and their implications in the context of the game.

Game Structure and Rules


Players: Two players.
Strategies: Each player has three possible moves: Rock, Paper, and Scissors.
Outcomes: The game has the following outcomes based on the moves chosen by each player:
o Rock crushes Scissors: Rock wins.
o Scissors cuts Paper: Scissors wins.
o Paper covers Rock: Paper wins.
o If both players choose the same move, the game is a tie.

Payoff Matrix:
The payoff matrix represents the outcomes for each combination of moves.
For example, let's assign:
• Win: +1 point for the winner and -1 point for the loser.
• Tie: 0 points for both players.
Here is the payoff matrix for Player 1 (rows) and Player 2 (columns):
Player-1 | Player-2 Rock Paper Scissors
Rock 0,0 -1, 1 1, -1
Paper 1, -1 0, 0 -1, 1
Scissors -1, 1 1, -1 0, 0

Player-2 Rock Paper Scissors


Rock 0 1 -1
Paper -1 0 1
Scissors 1 -1 0
Player-1 Rock Paper Scissors
Rock 0 -1 1
Paper 1 0 -1
Scissors -1 1 0

Calculating Nash Equilibrium


In pure strategies, players consistently choose one of the three moves. However, in rock-
paper-scissors, no pure strategy Nash equilibrium exists because each player's optimal move
depends on the opponent's move. For example:
• If Player 1 always chooses Rock, Player 2 can always choose Paper and win.
• Thus, each player can always improve their payoff by changing their strategy in
response to the opponent's strategy.

Calculating Mixed Strategy Nash Equilibrium


To calculate the mixed strategy Nash Equilibrium for the rock-paper-scissors game, we need
to determine the probabilities with which each player should choose Rock, Paper, and
Scissors such that neither player can improve their expected payoff by unilaterally changing
their strategy.

Expected payoff for Player 1 choosing Rock:


E(Rock)=( PR*0 )+( PP*-1 )+( PS*1 )
E(Rock)=( 1/3*0 )+( 1/3*-1 )+( 1/3*1 ) = 0
Expected payoff for Player 1 choosing Paper:
E(Paper)=( PR*1 )+( PP*0 )+( PS*-1 )
E(Paper)=( 1/3*1 )+( 1/3*0 )+( 1/3*-1 ) = 0

Expected payoff for Player 1 choosing Scissors:


E(Scissors)= ( PR*-1 )+( PP*1 )+( PS*0 )
E(Scissors)= ( 1/3*-1 )+( 1/3*1 )+( 1/3*0 ) = 0

The same calculations apply for Player 2, given the symmetry of the game and the equal
probabilities.
Conclusion on Mixed Strategy Nash Equlibrium:

This means that each player will randomly choose Rock, Paper, and Scissors with equal
probabilities of 1/3. This strategy ensures that neither player can predict the other’s move,
thereby making it impossible to improve their expected payoff by deviating from this
strategy.
This reflects that each player is indifferent among their choices because the expected utilities
are equal, supporting the equilibrium strategy where each move is chosen with a probability
of 1/3.

Calculating VNM Preferences for Rock-Paper-Scissor’s game:


Von Neumann-Morgenstern (vNM) utility theory is used to represent preferences under
uncertainty. In the context of the rock-paper-scissors game, calculating vNM preferences
involves determining the utility values associated with each outcome.
In simple let’s assign: U(W)=1, U(L)=0, U(D)=0.5

Expected Utility Calculation:


In the context of mixed strategies, where each player randomizes their moves with equal
probabilities, we calculated the expected utility for each strategy.
I.E.

Player-1’s Expected Utility:


Conclusion:
• The calculations show that the expected utility for Player 1 is 0.5 for each of the three
strategies (Rock, Paper, Scissors). The same symmetry applies to Player 2, given the
identical utility assignments and probabilities.

• This use of vNM utilities demonstrates that the preferences over mixed strategies are
consistent with the equilibrium concept, where players maximize their expected utility
by randomizing their moves equally.

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