game-theory - Concepts

Explore concepts tagged with "game-theory"

Total concepts: 44

Concepts

Public Goods Game - An experimental game in which players choose how much to contribute to a shared pool that benefits everyone.
Risk Dominance - An equilibrium selection criterion that prefers strategies less risky under uncertainty about what other players will choose.
Schelling Point - A solution people converge on naturally without explicit communication.
Trust Game - A two-player experiment that measures trust by having one player invest in another who can return any portion.
Common Knowledge - Information that everyone knows, knows that everyone knows, and so on infinitely, enabling coordination without communication.
Dictator Game - An experiment where one player unilaterally divides a sum between themselves and another, who has no choice but to accept.
Convention - A self-perpetuating regularity of behavior that solves a recurrent coordination problem through mutual expectation rather than explicit agreement.
Moral Hazard - The tendency for people to take greater risks when they are insulated from the consequences, often because someone else bears the cost.
Nash Equilibrium - A state in a strategic game where no player can improve their outcome by unilaterally changing their strategy.
Positive-Sum Game - A situation where total value can expand so all participants can benefit simultaneously.
Evolutionarily Stable Strategy - A strategy that, once adopted by most of a population, cannot be successfully invaded by any alternative strategy.
Aumann's Agreement Theorem - Two rational agents with common knowledge of each other's beliefs cannot agree to disagree about probabilities.
Stag Hunt - A coordination game in which players must choose between a high-payoff cooperative option that requires trust and a safe, lower-payoff individual option.
Backward Induction - A reasoning method in sequential games where players think ahead to the final outcome and work backwards to determine optimal strategy at each decision point.
Folk Theorem - In repeated games with sufficient patience, almost any individually rational outcome can be sustained as an equilibrium.
Repeated Game - A game played multiple times by the same players, where reputation, reciprocity, and long-term incentives reshape strategy.
Prisoner's Dilemma - A game theory scenario demonstrating why rational individuals might not cooperate even when cooperation would benefit everyone.
Money Game vs Status Game - A distinction between pursuing wealth (a positive-sum game that can benefit everyone) versus pursuing status (a zero-sum game where gains come at others' expense).
Zero-Sum Game - A situation where one participant's gain is exactly balanced by another's loss, resulting in a fixed total payoff.
Minimax - A decision rule for minimizing the worst-case potential loss when facing uncertainty or adversarial conditions.
Principal-Agent Problem - A conflict of interest that arises when one party (the agent) is empowered to act on behalf of another (the principal) but has different incentives and more information.
Cheap Talk - Communication that costs nothing to produce and carries no commitment, making it unreliable as a signal of true intent.
Infinite Games - Games played with the purpose of continuing play rather than winning.
Costly Signaling Theory - The principle that signals must be expensive or hard to fake to credibly communicate information about the signaler.
Negative-Sum Game - A situation where the total losses exceed the total gains, leaving participants collectively worse off than before.
Evolutionary Game Theory - The application of game theory to populations of agents whose strategies evolve under selection pressure.
Coordination Game - A game-theoretic situation where players benefit from making compatible choices and have little incentive to defect once aligned.
Signaling - Actions taken primarily to communicate information about oneself to others rather than for their direct practical value.
Dollar Auction - A game theory thought experiment where players bid on a dollar bill but both the winner and second-highest bidder must pay, demonstrating how rational actors get trapped into escalating commitments.
Collective Action Problem - A situation where multiple individuals would benefit from cooperating but fail to do so because of conflicting individual incentives.
Countersignaling - Deliberately avoiding or downplaying signals to demonstrate that one doesn't need them.
Dominant Strategy - A strategy in game theory that yields a better outcome for a player regardless of what other players choose to do.
Finite Games - Games played for the purpose of winning, with fixed rules and clear endpoints.
Battle of the Sexes - A coordination game where two players prefer to be together but disagree on which of two activities to do.
Winner's Curse - The tendency for the winning bid in a competitive auction or negotiation to exceed the true value of the item, resulting in a net loss for the 'winner'.
Reputation - The shared impression others hold of an actor based on observed behavior, sustaining trust and cooperation across repeated interactions.
Hawk-Dove Game - A game-theory model of conflict over resources where aggressive and peaceful strategies must coexist in equilibrium.
Maximin - A decision strategy that chooses the option whose worst-case outcome is the least bad, prioritizing protection against the worst possible scenario.
Tit for Tat - A game theory strategy that starts by cooperating and then mirrors the opponent's previous move in each subsequent round.
Ultimatum Game - A two-player experiment where a proposer offers a split of a sum and the responder can accept or reject, with rejection giving both nothing.
Expected Utility Theory - The standard economic model of rational decision-making under uncertainty, where agents choose options that maximize expected utility.
Pareto Efficiency - A state of resource allocation where no individual can be made better off without making at least one other individual worse off.
Mechanism Design - The field of economics that designs rules, incentives, and institutions to achieve desired outcomes when participants act in their own self-interest.
Adverse Selection - A market situation where information asymmetry causes the wrong type of participants to be disproportionately attracted to a transaction, degrading market quality.

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