game theory flash cards

### Game Theory I:

- Strategic vs. Parametric Reasoning: Strategic reasoning involves predicting other agents' actions, unlike parametric reasoning, which deals with passive objects like rocks.

- Agents & Rationality: Agents (humans, corporations, animals) act rationally, aiming for outcomes that best satisfy their preferences.

- Sequential vs. Simultaneous Play: Sequential play gives one player the advantage of perfect information, while simultaneous play does not.

- Prisoner's Dilemma: A classic game showing how two rational individuals may not cooperate, even if it appears that cooperation is in their best interest.

- Utilities: Payoffs (rewards or punishments) are ranked either ordinally (relative preference) or cardinally (magnitude of preference).

### Game Theory II:

- Nash Equilibrium: A state where no player can improve their outcome by changing strategies alone. Multiple Nash equilibria can exist in a game.

- Dominance: A strategy dominates if it yields a better outcome no matter what the other player does.

- Pareto Optimality: A payoff is Pareto optimal if no one can be made better off without making someone else worse off.

- Assurance Games: Players face dilemmas between payoff-dominant (risky but rewarding) and risk-dominant (safe but less rewarding) strategies.

### Game Theory III:

- Repeated Games: Games that involve multiple rounds of play, with players making decisions based on prior actions. Strategies like "Tit-for-tat" and "Grim" can emerge in such games.

- Coordination Games: Players must align their strategies to achieve a mutual benefit. This can involve conventions (social norms) or brinkmanship, as seen in games like "Chicken."

- Pure vs. Impure Coordination: Pure coordination games involve no preference for any particular equilibrium, while impure coordination games involve conflicting preferences, requiring negotiation or risk.

### Game Theory IV:

- Hobbesian Political Authority: Hobbes describes the "state of nature" as a condition where no political authority exists, leading to a state of war due to competition, diffidence, and glory-seeking.

- Game-Theoretic Representation: The "state of nature" is modeled like a prisoner's dilemma, where agents fail to cooperate without an external authority to enforce agreements.

- Political Authority and Payoff Matrix: The state (government) changes the payoff structure, compelling agents to comply with covenants by increasing the cost of non-compliance.

These slides focus on foundational concepts in game theory, including strategies, equilibria, and applications in both human interactions and political theory.