A course in Game Theory学习笔记（一）

1 Introduction

1.1 Game theory

Game theory is a bag of analytical tools designed to help us understand the phenomena that we observe when decision-makers interact. 

basic assumptions:

they are rational(decision-makers pursue well-defined exogenous objectives )

they reason strategically(take into account their knowledge or expectations of other decision-makers’ behavior )

1.2 Games and Solutions

game:a description of strategic interaction that includes the constraints on the actions that the players can take and the players’ interests, but does not specify the actions that the players do take.

solution:a systematic description of the outcomes that may emerge in a family of games.

Game types:

a.Noncooperative and Cooperative Games

primitives:actions of individual players/joint actions of groups of players

b.Strategic Games and Extensive Games

strategic game:each player chooses his plan of action once;all players’ decisions are made simultaneously

extensive games:specifies the possible orders of events; each player can consider his plan of action whenever he has to make a decision.

c.Games with Perfect and Imperfect Information

perfect information:participants are fully informed about each others’ moves

1.3 Game Theory and the Theory of Competitive Equilibrium

game theory:consider information about the other players’ behavior

theory of competitive equilibrium:interested only in some environmental parameters

1.4 Rational Behavior

decision-maker is “rational”:he is aware of his alternatives, forms expectations about any unknowns, has clear preferences, and chooses his action deliberately after some process of optimization.

Elements of a model of rational choice:

a preference relation is a complete reflexive transitive binary relation.

a utility function U: C → R(the other way to specify preference)

1.5 The Steady State and Deductive Interpretations

The steady state interpretation (evolutive interpretation):

explain some regularity observed in a family of similar situations

The deductive interpretation (eductive interpretation）

infer the restrictions that rationality imposes on the outcome

1.6 Bounded Rationality

the asymmetry between individuals in their abilities in real life

1.7 Terminology and Notation

A function f: R → R is concave if f(αx + (1 − α)x 0 ) ≥ αf(x) + (1 − α)f(x 0 ) for all x ∈ R, all x 0 ∈ R, and all α ∈ [0, 1]

Let N be a finite set and let X ⊆ R N be a set. Then x ∈ X is Pareto efficient if there is no y ∈ X for which yi > xi for all i ∈ N; x ∈ X is strongly Pareto efficient if there is no y ∈ X for which yi ≥ xi for all i ∈ N and yi > xi for some i ∈ N.

N: the set of players

Profile:collection of values of some variable, one for each player (xi)i∈N

Partition: a partition of X is a collection of disjoint subsets of X whose union is X

Probability measure:a probability measure µ on a finite (or countable) set X is an additive function that associates a nonnegative real number with every subset of X