#1
What is a zero-sum game?
A game where one player's gain is exactly balanced by another player's loss.
ExplanationOne player's gain equals another's loss.
#2
What is the 'Battle of the Sexes' game?
A game where players have conflicting preferences but prefer agreement over disagreement.
ExplanationPreference for agreement over disagreement.
#3
What is the Nash equilibrium?
A solution concept in game theory where each player's strategy is optimal given the strategies of the other players.
ExplanationOptimal strategy given others' strategies.
#4
In game theory, what does 'dominant strategy' refer to?
A strategy that is always chosen by rational players regardless of what others do.
ExplanationAlways chosen regardless of others' actions.
#5
What is a mixed strategy in game theory?
A strategy where players randomly choose among several pure strategies with certain probabilities.
ExplanationRandom selection of pure strategies.
#6
What does the term 'equilibrium' refer to in game theory?
A stable state where no player has an incentive to change their strategy unilaterally.
ExplanationStable state without unilateral incentive.
#7
What is the 'principle of dominance' in game theory?
A principle that states a strategy is dominant if it always results in the highest payoff regardless of the other player's strategy.
ExplanationAlways yields the highest payoff.
#8
What is the 'tragedy of the commons' in game theory?
A situation where individuals act in their own self-interest, depleting a shared resource, leading to a worse outcome for everyone.
ExplanationSelf-interest leads to shared resource depletion.
#9
What is the 'trust game' in game theory?
A game where players must trust each other to achieve the best outcome.
ExplanationAchieving best outcome through trust.
#10
What is the 'stag hunt' game in game theory?
A game where players must choose between hunting a stag or a hare, with cooperation yielding a higher payoff.
ExplanationCooperation yields higher payoff in hunting.
#11
What is the 'beauty contest' game in game theory?
A game where players compete to predict the average of all players' choices.
ExplanationPredicting average of players' choices.
#12
What is the Prisoner's Dilemma?
A situation in which two individuals acting in their own self-interest pursue a course of action that does not result in the optimal outcome.
ExplanationSelf-interest leads to suboptimal outcome.
#13
What is the difference between simultaneous and sequential games?
In simultaneous games, players move without knowing the opponents' moves, while in sequential games, players observe opponents' moves before making decisions.
ExplanationMove timing and information availability differ.
#14
What is the concept of a Pareto-optimal outcome?
An outcome where no player can improve their situation without worsening another player's situation.
ExplanationNo improvement without worsening others.
#15
What does 'subgame perfect equilibrium' mean in game theory?
A solution concept that requires players to play optimally at every stage of the game.
ExplanationOptimal play at every stage.
#16
What is the 'centipede game' in game theory?
A game where players take turns making a move, with each move leading to a higher payoff.
ExplanationTurn-based moves with increasing payoffs.
#17
What does the 'folk theorem' in game theory state?
A theorem that describes the possibility of sustaining cooperative outcomes in repeated games.
ExplanationCooperative outcomes in repeated games.
#18
What is the 'core' in cooperative game theory?
A set of strategies where no player can improve their payoff without worsening the payoff of another player.
ExplanationNo individual improvement without worsening others.
#19
What is 'perfect Bayesian equilibrium' in game theory?
An equilibrium concept in extensive-form games where players' strategies and beliefs are consistent with the observed play.
ExplanationConsistent strategies and beliefs with observed play.
#20
What is the 'winner's curse' in auction theory?
The tendency for the winner of an auction to overpay, assuming they have won the item at a low price.
ExplanationWinner overpays due to low price assumption.
#21
What is 'rationalizability' in game theory?
A solution concept that identifies strategies that can be supported by iteratively eliminating dominated strategies.
ExplanationIdentifying supported strategies by eliminating dominated ones.
#22
What is 'backward induction' in game theory?
A process of solving a game from the end to the beginning by reasoning backward.
ExplanationSolving from end to beginning by backward reasoning.
#23
What is the 'chain-store paradox' in game theory?
A paradox where the existence of multiple chains of stores leads to lower prices for consumers.
ExplanationMultiple stores lead to lower consumer prices.
#24
In game theory, what is a 'trigger strategy'?
A strategy that is used as a retaliation mechanism in repeated games.
ExplanationRetaliation mechanism in repeated games.
#25
What is the 'common knowledge' assumption in game theory?
The assumption that all players have access to the same information.
ExplanationAll players have access to the same information.