Game Theory I: Vocabulary (Gateway, Lecture 3)

Vocabulary-style flashcards covering key game-theory concepts from the lecture notes.

Prisoner's Dilemma

A two-player game where each player can cooperate (C) or defect (D); each prefers to defect regardless of the other’s move; mutual cooperation beats mutual defection; if repeated, ongoing cooperation can be better for everyone.

Temptation to Exploit (T)

The payoff to a player who defects while the other cooperates.

Reward for Mutual Cooperation (R)

The payoff when both players cooperate.

Punishment for Mutual Defection (P)

The payoff when both players defect.

Sucker’s Payout (S)

The payoff to a player who cooperates while the other defects.

Dominant Strategy

A strategy that yields a higher payoff for a player regardless of the other players’ actions.

Strictly Dominant

A dominant strategy that is strictly better in every possible opponent's move.

Weakly Dominant

A dominant strategy that is never worse and sometimes better.

Iterated Elimination of Dominated Strategies

A process that repeatedly removes strategies that are dominated, then repeats on the reduced game.

Nash Equilibrium

A strategy profile where each player's strategy is a best response to the others; no player can gain by unilaterally deviating.

Best Response

A strategy that yields the highest payoff given the other players’ strategies.

Pareto Improvement

An outcome that makes at least one player better off without making anyone worse off.

Pareto Efficiency

An outcome for which no Pareto improvement is possible.

Stag Hunt

A game where hunting stag together yields a large payoff; hunting hare yields a smaller payoff regardless of the partner; cooperation yields big gains if both coordinate.

Chicken

A game where each may swerve or go straight; you win if the other swerves, you lose if you swerve, both swerve yields 0, neither swerves yields a crash.

Battle of the Sexes

A coordination game where there are two preferred outcomes; you want your own favorite outcome, the other wants theirs; no agreement yields 0.

Pure Strategy

A complete plan of action with no randomness; not just “try your best” or “rock or paper idk which.”

Mixed Strategy

A strategy that assigns probabilities to pure strategies and randomizes over them.

Simultaneous vs Sequential

Simultaneous: players move at the same time; Sequential: moves occur in sequence, with later moves potentially knowing earlier moves.

Perfect vs Imperfect Information

Perfect information means all moves are visible to all players; imperfect information means some moves are hidden or uncertain.

Complete vs Incomplete Information

Complete information means payoffs and game structure are common knowledge; incomplete information means some aspects are unknown.

Maximize Expected Value

Choosing actions to maximize expected payoff given beliefs about others’ actions; can be circular (e.g., in Rock–Paper–Scissors).

Conditional Strategy

A strategy that depends on others’ actions or types; used to remove options or constrain choices.

Axelrod's Claim

Indefinitely repeated interactions promote cooperation; in other words, repeated games make cooperation more likely.

Equilibrium

A state a system can stay in; some equilibria are more stable than others.