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1. Can someone please teach me game theory or tell me a good place wher I can learn some basics of game theory? Thanks
2. (Original post by himurakenshin)
Can someone please teach me game theory or tell me a good place wher I can learn some basics of game theory? Thanks
Get the Heinemann D2 text, and work through the Game Theory chapter. It only covers two-person zero-sum games, but it's the place to start.

Aitch
3. you and a friend are arrested for suspected robbery.
they seperate you before you can communicate.

if you don't confess and your friend doesn't, then you will both walk free.
if you don't confess but your friend does, he gets a reward and you get a long time in prison
if you confess but he doesn't, you get the reward and he gets a long time in prison.
if both of you confess, you will get short terms in prison.

do you confess?

it shows the interdependance of two apparently isolates things - you and your friend who cannot communicate can still reach a mutually beneficial decision by considering future outcomes.

this is similar in economics, with firms. competing firms will reluctantly engage in price competition because they know they will both lose out in profits. so even if they don't communicate (which is illegal price fixing), prices still remain high.
4. http://en.wikipedia.org/wiki/Game_theory
Excellent resource in regards to Game Theory there mate.

Also, as given as an example by mik1w.. found the Prisoners Dilemma also on wikipedia..
http://en.wikipedia.org/wiki/Prisoner%27s_dilemma

MdSalih
5. the wikipidia site has a great section on it, interesting read!
6. first of this is a quote from wikipedia:

In games of complete information each player has the same game-relevant information as every other player. Chess and the prisoner's dilemma exemplify complete-information games
How is pd a complete-information game ? One prisoner doesn't know what the other prisoner will do.

John von Neumann had the fundamental and surprising insight that probability provides a way out of this conundrum. Instead of deciding on a definite action to take, the two players assign probabilities to their respective actions, and then use a random device which, according to these probabilities, chooses an action for them. Each player computes the probabilities so as to minimise the maximum expected point-loss independent of the opponent's strategy; this leads to a linear programming problem with a unique solution for each player. This minimax method can compute provably optimal strategies for all two-player zero-sum games.

For the example given above, it turns out that the first player should choose action 1 with probability 57% and action 2 with 43%, while the second player should assign the probabilities 0%, 57% and 43% to the three actions A, B and C. Player one will then win 2.85 points on average per game.
how is this calculated?

thanks for the help and I would also appreciate some information on applications of the PD. I understand pd but i don't really get twhat this has to do with anything.

thanks alot once again.
7. (Original post by himurakenshin)
first of this is a quote from wikipedia:

How is pd a complete-information game ? One prisoner doesn't know what the other prisoner will do.

how is this calculated?

thanks for the help and I would also appreciate some information on applications of the PD. I understand pd but i don't really get twhat this has to do with anything.

thanks alot once again.
I still think get the Heinemann D2 text, and work through the Game Theory chapter!

Incidentally, the default position is (unless you are told otherwise) that each player knows all of the conditions and decisions of the game. This is often not very realistic!

Aitch
8. (Original post by Aitch)
I still think get the Heinemann D2 text, and work through the Game Theory chapter!

Incidentally, the default position is (unless you are told otherwise) that each player knows all of the conditions and decisions of the game. This is often not very realistic!

Aitch
I would like to get the d2 text, except I am preparing for something which I have to do on wednesday

So does anybody know how to calculate minimax probabilities ?
also I would like to know some applications of game theory. especially applications of the prisoner's dillema

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