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3 Games: T R S P

The document discusses various game theory concepts, including the Chicken game, Stag Hunt, and the Ultimatum Game, highlighting the dynamics of cooperation and competition among players. It introduces the concept of Evolutionary Game Theory (EGT), which extends traditional game theory to analyze interactions within populations over time. EGT focuses on the stability of strategies and the potential for strategy changes among individuals in a population.

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0% found this document useful (0 votes)
7 views2 pages

3 Games: T R S P

The document discusses various game theory concepts, including the Chicken game, Stag Hunt, and the Ultimatum Game, highlighting the dynamics of cooperation and competition among players. It introduces the concept of Evolutionary Game Theory (EGT), which extends traditional game theory to analyze interactions within populations over time. EGT focuses on the stability of strategies and the potential for strategy changes among individuals in a population.

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gefahagv
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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3 GAMES 7

trivial, but two games stand out: Obviously, rational responders should
accept even the smallest positive offer, since
• Chicken (T > R > S > P ) the alternative is getting nothing. Pro-
posers, therefore, should be able to claim
C D almost the entire sum. In a large num-
C R=2, R=2 S=1, T=3 ber of human studies, however, conducted
D T=3, S=1 P=0, P=0 with different incentives in different coun-
tries, the majority of proposers offer 40 to
Example: Two drivers with something to 50 % of the total sum, and about half of
prove drive at each other on a narrow all responders reject offers below 30 %
road. The first to swerve loses faces among
his peers (the chicken). If neither swerves, 3.3 Public Good Game
however, the obvious worst case will oc-
A group of 4 people are given $ 200 each
cur.
to participate in a group investment project.
• Stag Hunt (R > T > P > S) They are told that they could keep any
money they do not invest. The rules of
C D the game are that every $1 invested will
C R=3, R=3 S=0, T=2 yield $ 2, but that these proceeds would
D T=2, S=0 P=1, P=1 be distributed to all group members. If
every one invested, each would get $ 400.
However, if only one person invested, that
Example: Two hunters can either jointly “sucker” would take home a mere $ 100.
hunt a stag or individually hunt a rabbit. Thus, the assumed Nash equilibrium could
Hunting stags is quite challenging and re- be the combination of strategies, where
quires mutual cooperation. Both need to no one invests any money. And we can
stay in position and not be tempted by show that this is indeed the Nash equilib-
a running rabbit. Hunting stags is most rium.
beneficial for society but requires a lot of We will not display this game in a pay-
trust among its members. The dilemma off matrix, since each player has a too big
exists because you are afraid of the oth- set of strategies (the strategy sn is given
ers’ defection. Thus, it is also called trust by the amount of money that player n
dilemma. wants to contribute, e.g. s1 = 10 means,
that player 1 invests 10 $). Nevertheless
3.2 The Ultimatum Game this is a game in normal form and there-
Imagine you and a friend of yours are fore it has a payoff function for each player.
walking down the street, when suddenly The payoff function for, let’s say, player 1
a stranger stops you and wants to play a is given by
game with you:
He offers you 100 $ and you have to 2 · (s1 + s2 + s3 + s4 )
agree on how to split this money. You, P = − s1
4
as the proposer, make an offer to your 2 · (s2 + s3 + s4 )
friend, the responder. If he accepts your = − 0, 5 · s1
4
offer, the deal goes ahead. If your friend
rejects, neither player gets anything. The But this means, that every investment
stranger will take back his money and the s1 of player 1 will diminish his payoff.
game is over. Therefore, a rational player will choose
4 EVOLUTIONARY GAME THEORY 8

the strategy sn = 0, i.e. he will invest no 4 Evolutionary Game The-


money at all. But if everyone plays this ory
strategy, no one can benefit by changing
his strategy while the other players keep Since game theory was established as a
their strategy unchanged. And this is just discipline for its own, it has been very
the definition of the Nash equilibrium. successful.
The dilemma lies exactly herein, since However, there have been situations,
the greatest benefit for the whole group which could not be properly described by
arises, if everyone contributed all of his the language of game theory.
money. Many people have attempted to use
traditional game theory to analyze eco-
3.4 Rock, Paper, Scissors nomic or political problems, which typi-
cally involve a large population of agents
The players simultaneously change their
interacting. However, traditional game
fists into any of three ”objects”:
theory is a “static” theory, which reduces
its usefulness in analyzing these very sorts
• Rock: a clenched fist.
of situations. EGT improves upon tra-
• Paper : all fingers extended, palm ditional game theory by providing a dy-
facing downwards, upwards, or side- namics describing how the population will
ways. change over time. Therefore a new math-
ematical extension has been developed (mainly
• Scissors: forefinger and middle fin- by John Maynard Smith in his book Evo-
ger extended and separated into a lution and the Theory of Games, 1982),
”V” shape. which is called evolutionary game theory
(EGT)
The objective is to defeat the oppo- I will show in the next section, in what
nent by selecting a weapon which defeats kinds of situations EGT might be appli-
their choice under the following rules: cable and what are the most significant
differences to game theory.
1. Rock crushes Scissors (rock wins)

2. Scissors cut Paper (scissors win) 4.1 Why EGT?


3. Paper covers Rock and roughness is Evolutionary game theory (EGT) stud-
covered (paper wins) ies equilibria of games played by a pop-
ulation of players, where the fitness of
If players choose the same weapon, the the players derives from the success each
game is a tie and is played again. player has in playing the game. It pro-
This is a classic non-transitive system vides tools for describing situations where
which involves a community of three com- a number of agents interact and where
peting species satisfying a relationship. agents might change the strategy they fol-
Such relationships have been demon- low at the end of any particular interac-
strated in several natural systems. tion.
So, the questions of EGT are: Which
populations are stable? When do the in-
dividuals adopt other strategies? Is it
possible for mutants to invade a given pop-
ulation?

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