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Summary: 9/22/2010
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What is game theory...
· Game theory studies settings where multiple parties
(agents) each have
different preferences (utility functions),
different actions that they can take
· Each agent's utility (potentially) depends on all
agents' actionsagents actions
What is optimal for one agent depends on what other
agents do
· Very circular!
· Game theory studies how agents can rationally form
beliefs over what other agents will do, and (hence)
how agents should act
Useful for acting as well as predicting behavior of others
Example:
· Suppose we have the following game:
· each person submits a number between 0
and 100.
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