Game Theory Questions Medium
The concept of Bayesian games in game theory refers to a type of strategic interaction where players have incomplete information about the other players' characteristics or types. In a Bayesian game, each player has a belief or probability distribution over the possible types of the other players, and these beliefs are updated based on the information revealed during the game.
Unlike in standard game theory, where players have complete information about the game structure and the types of other players, Bayesian games allow for uncertainty and the incorporation of subjective beliefs. This makes them more realistic and applicable to real-world situations where players may have limited information or face uncertainty.
In a Bayesian game, players make decisions based on their beliefs about the other players' types and the possible actions they might take. These beliefs are updated using Bayes' rule as new information is revealed. The strategies chosen by players in a Bayesian game are called Bayesian strategies, which specify actions for each possible type of player.
The concept of Bayesian Nash equilibrium is used to analyze Bayesian games. A Bayesian Nash equilibrium is a set of strategies, one for each possible type of player, such that no player can unilaterally deviate from their strategy and obtain a higher expected payoff, given their beliefs and the strategies of the other players.
Overall, Bayesian games provide a framework for analyzing strategic interactions under uncertainty, where players have incomplete information and update their beliefs based on new information during the game.