Introduction
All of the notes that you’re about to see were written while I was watching the open course at Yale. and this was my first attempt at writing notes in English, which means that many mistakes in synax and grammar are quite possible.
Why I choose wrting English class notes is to make this experience more meaningful!
Lecture 1
Overview
We introduce Game Theory by playing a game. We organize the game into players, their strategies, and their goals or payoffs; and we learn that we should decide what our goals are before we make choices. With some plausible payoffs, our game is a prisoners’ dilemma. We learn that we should never choose a dominated strategy; but that rational play by rational players can lead to bad outcomes. We discuss some prisoners’ dilemmas in the real world and some possible real-world remedies. With other plausible payoffs, our game is a coordination problem and has very different outcomes: so different payoffs matter. We often need to think, not only about our own payoffs, but also others’ payoffs. We should put ourselves in others’ shoes and try to predict what they will do. This is the essence of strategic thinking.
Five Lessons
Professor Ben Polak introduces us five first lessons and some definitions about Game Theory:
- Do not play a strictly dominated strategy(Pay attention to the difference between dominated strategy and dominate strategy)Def: We say that my stragealpha strictly dominates my strategybeta if my payoff fromalpha is strictly greater than that of my strategybeta regardless of what others do.
- Rational choice can lead to outcomes that suck
- You can’t get what you want until you know what you want(Know your payoff matrix before playing the game)
- Put yourself in other’s shoes and try to figure out what they will do.
