Static dynamic games game theory

Petersburg, Editors: Leon A. Petrosyan Vladimir V. Mazalov Nikolay A. Zenkevich Copyright: Hard cover Soft cover eBook. Salukvadze Vladislav I. Zhukovskiy Copyright: Hard cover Soft cover eBook. Jessie Donald G. Saari Copyright: Soft cover eBook.

View all book titles. Publish with us Submission guidelines. Policies and ethics. Download book proposal form. Payoff refers the net benefit or loss that accrue to each player from carrying out his strategy.

A Nash equilibrium is combination of strategies such that no player has any incentive to change its strategy unilaterally. Games are either simultaneous-move or sequential, static or dynamic, one-off or repeated, cooperative or non-cooperative, etc. A simultaneous-move game is a game in which both players must choose their strategies at the same time. A sequential game is a game in which one player choses its strategy before the other.

The player which decides first typically has a first-mover advantage. A static game is a game which is both simultaneous-move and one-off i. A dynamic game, on the other hand, is one which is either repeated or sequential. A repeated game is a game which is played over and over again. Repeated games are further classified into infinitely-repeated games, games which continue forever; and finitely-repeated games, which are exact opposite of infinitely-repeated games.

A cooperative-game is a game in which both players can communicate and cooperate, and a non-cooperative game is a game in which no cooperation is possible. A game can be visualized using either a payoff matrix or a decision tree also called extensive form of a game. The normal form of a game is a presentation in which the game is visualized using a payoff matrix. A payoff matrix is a table which lists the players of a game, their strategies and their associated payoffs such that the payoff that accrue to the row player is listed first.

Normal form is useful in case of a static game i. Such games are also called one-off simultaneous-move games. It is better to present a game using a decision tree also called a game tree when the game under consideration is a dynamic game i.

Extensive form of a game is a presentation in which the game is visualized using a decision tree. Strategies that players in an economic game can employ are classified into either dominant or dominated, pure or mixed, etc. A dominant strategy is a strategy which is optimal regardless of strategy of the other player.