Enhance Your Learning with Economics - Game Theory Flash Cards for quick understanding
A branch of mathematics and economics that studies strategic decision-making, cooperation, and competition between rational individuals or organizations.
The process of selecting the best course of action in a situation where the outcome depends on the actions of others.
The two fundamental aspects of game theory, where individuals or organizations can choose to cooperate for mutual benefit or compete for individual gain.
A concept in game theory where each player's strategy is optimal given the strategies of the other players, resulting in a stable outcome.
A classic example in game theory where two individuals, acting in their own self-interest, fail to achieve the optimal outcome due to a lack of cooperation.
A strategy in game theory where players randomize their actions to achieve the best possible outcome in situations of uncertainty.
A strategy in game theory that yields the best outcome regardless of the strategies chosen by other players.
Games in which players make decisions in a specific order, taking into account the actions and decisions of previous players.
Games in which players make decisions simultaneously, without knowledge of the other players' choices.
Games that are played multiple times, allowing players to learn from previous interactions and adjust their strategies accordingly.
The process of reaching an agreement through strategic decision-making and compromise, often involving conflicting interests.
The practical use of game theory in various fields, such as economics, business, politics, and social sciences, to analyze and predict behavior.
The application of game theory to economic situations, including market competition, pricing strategies, and decision-making by firms and consumers.
The use of game theory to analyze strategic interactions and decision-making in business settings, such as pricing, advertising, and competition.
The application of game theory to political situations, including voting behavior, coalition formation, and international relations.
A representation of a game in matrix form, showing the strategies and payoffs of each player.
A representation of a game using a decision tree, showing the sequence of moves and decisions made by players.
A table that shows the payoffs or outcomes for each combination of strategies chosen by players in a game.
A type of game where the total payoff to all players is constant, meaning that one player's gain is equal to another player's loss.
A type of game where the total payoff to all players can vary, allowing for situations where all players can benefit or lose.
A game where players can form coalitions and make binding agreements to achieve better outcomes through cooperation.
A game where players act independently and do not make binding agreements, relying on their own strategies and decisions.
A state in which no individual can be made better off without making someone else worse off, representing an optimal allocation of resources.
A situation where one outcome is preferred by all players over another outcome, indicating a better solution for everyone.
A stable state in a game where no player has an incentive to change their strategy, given the strategies of the other players.
The process of determining the equilibrium outcomes and strategies in a game, often using mathematical models and solution concepts.
An equilibrium where each player's dominant strategy leads to the best outcome for themselves, regardless of the strategies chosen by other players.
An equilibrium where players randomize their strategies to achieve the best possible outcome, given the strategies of the other players.
An equilibrium where players' strategies are optimal not only in the current stage of the game but also in all subsequent stages or subgames.
A solution concept in game theory where players reason backward from the end of a game to determine their optimal strategies.
A type of competition in game theory where one player, the leader, makes their decision first, and the other player, the follower, responds accordingly.
A type of competition in game theory where firms set prices rather than quantities, leading to a price war and potential price undercutting.
A type of competition in game theory where firms choose quantities to produce, taking into account the quantities chosen by other firms.
An agreement between firms to restrict competition and increase their joint profits, often through price-fixing or market sharing.
A strategy in repeated games where a player initially cooperates and then mimics the opponent's previous move, rewarding cooperation and punishing defection.
A result in game theory that states that in repeated games with a sufficiently long time horizon, almost any outcome can be achieved as an equilibrium.
The relative ability of individuals or groups to influence the outcome of a negotiation or bargaining process.
Strategies and techniques used during a negotiation to achieve desired outcomes, such as compromising, collaborating, or competing.
A framework in social science that models individual decision-making as a rational process, based on preferences and constraints.
A solution concept in game theory where players choose strategies that minimize their maximum possible loss, taking into account the uncertainty of outcomes.
A branch of game theory that studies the dynamics of strategic interactions and the evolution of strategies in populations over time.
The process in evolutionary game theory where the strategies of individuals or groups change in response to the strategies of others, leading to the emergence of new equilibria.
The phenomenon in game theory where the value or utility of a product or service increases as more people use or adopt it, creating positive externalities.
A situation in game theory where one party has more or better information than another party, leading to an imbalance of power and potential strategic advantage.
A problem in game theory where a principal (e.g., a company or government) delegates tasks to an agent (e.g., an employee or contractor) who may have different interests or incentives.
A situation in game theory where one party has more information about their own characteristics or qualities than the other party, leading to potential market failures.
A game in which one party, the sender, sends a signal to another party, the receiver, to convey information or influence their behavior.
Communication in game theory that is costless and lacks credibility, often leading to inefficient outcomes or failure to reach agreements.
A concept in game theory where players have beliefs about the strategies and types of other players, and their strategies are optimal given these beliefs.
The process of designing rules or mechanisms to achieve desired outcomes in strategic situations, taking into account the incentives and information of the participants.
The study of auctions and bidding strategies in game theory, analyzing different auction formats, such as English auctions, Dutch auctions, and sealed-bid auctions.
The process of designing and organizing markets to achieve desired outcomes, such as efficiency, fairness, and competition, using principles from game theory and economics.
A branch of game theory that incorporates psychological and behavioral factors into the analysis of strategic interactions, challenging the assumption of perfect rationality.
The use of controlled experiments to study strategic interactions and test theoretical predictions in game theory, providing empirical evidence and insights.
A branch of game theory that focuses on situations where players can form coalitions and make binding agreements to achieve better outcomes through cooperation.
A branch of game theory that studies situations where players act independently and do not make binding agreements, relying on their own strategies and decisions.
A strategy in game theory that, once adopted by a population, cannot be invaded by any alternative strategy, leading to long-term stability.
A game in game theory that illustrates the tension between individual and collective rationality, where players must choose between cooperation and defection.
A situation in game theory where individuals, acting in their own self-interest, deplete or degrade a shared resource, leading to an overall loss or tragedy.
Goods or services that are non-excludable and non-rivalrous, meaning that they are available to all individuals and one person's consumption does not reduce availability to others.
A problem in game theory where individuals can benefit from a public good without contributing to its provision, leading to under-provision or inefficiency.
A simple two-player game in game theory where each player simultaneously chooses heads or tails, trying to match or mismatch the other player's choice.
A sequential game in game theory where players take turns choosing to either continue the game or stop, with increasing payoffs for continuing but a risk of losing everything.
A game in game theory where players are asked to choose a number between 0 and 100, with the winner being the player whose number is closest to a fraction of the average of all numbers chosen.