Sunteți pe pagina 1din 4

# SYMBOLICSYSTEMS202:TheRationalityDebate(3units)WinterQuarter20032004,Stanford UniversityInstructor:ToddDavies GameTheoryThroughExamples(2/11/04) Gamesagainstnaturedecisiontheoryforasingleagent Expectedutilitytheoryforasingleagentissometimescalledthetheoryof"gamesagainstnature". Considerthisexample. Example1:Planningaparty Ouragentisplanningaparty,andisworriedaboutwhetheritwillrainornot.

Theutilitiesand probabilitiesforeachstateandactioncanberepresentedasfollows: Nature'sstates: Rain (p=1/3) Partyplanner'spossibleactions: Outside 1 Inside 2 TheexpectedutilityofanactionAgivenuncertaintyaboutastateS=Probability(S|A)*Utility(S|A)+ Probability(notS|A)Utility(notS|A)NotethatactionAcanbeviewedasacompoundgambleoroutcome. Also,notethattheprobabilityofastatecandependontheagent'schoiceofaction,although,intheabove example,itdoesnot. Forthepartyproblem:EU(Outside)=(1/3)(1)+(2/3)(3)=2.67;EU(Inside)=(1/3)(2)+(2/3)(2)=2 Therefore,chooseOutside,theactionwiththehigherexpectedutility (Noncooperative)gametheorydecisiontheoryformorethanoneagent,eachactingautonomously(no bindingagreements) Intheexamplesbelow,we'llassumetwoselfutilitymaximizingagents(orplayers),eachofwhomhas completeinformationabouttheoptionsavailabletothemselvesandtheotherplayeraswellastheirown andtheother'spayoffs(utilities)undereachoption. Example2Friendshopingtoseeeachother Considertwopeople,ChrisandKim.Theybothenjoyeachother'scompany,butneithercan communicatewiththeotherbeforedecidingwhethertostayathome(wheretheywouldnotseeeach other)orgotothebeachthisafternoon(wheretheycouldseeeachother).Eachprefersgoingtothe beachtobeingathome,andprefersbeingwiththeotherpersonratherthanbeingapart.Thisgamecanbe representedbythefollowingnormal(ormatrix)form:

Kim Home Chris Home (0,0) Beach (1,0) Eachplayerhasasetofstrategies(={Home,Beach}forbothplayersinthisexample).Specifyingone strategyifortherowplayer(Chris)andonestrategyjforthecolumnplayer(Kim)yieldsanoutcome, whichisrepresentedasapairofpayoffs(Rij,Cij),whereRijistheutilitytherowplayerreceives,andCij istheutilitythecolumnplayerreceives. Inthisexample,goingtothebeachisa(strictly)dominantstrategyforeachplayer,becauseitalways yieldsthebestoutcome,nomatterwhattheotherplayerdoes.Thus,iftheplayersarebothmaximizing theirindividualexpectedutilities,eachwillgotothebeach.SoBeachBeachisadominantstrategy equilibriumforthisgame.Becauseofthis,KimandChris,iftheyarerational,donotneedtocooperate (makeanagreement)aheadoftime.Eachcanjustpursuetheirowninterest,andthebestoutcomewill occurforboth. Example3"Friends"withasymmetricpreferences NowconsiderBettyandJohn.JohnlikesBetty,butBettydoesn'tlikeJohnthatmuch.Eachknowsthis, andneitherwantstocalltheotherbeforedecidingwhattodothisafternoon:stayattheirrespective homesorgototheneighborhoodswimmingpool.Hereisthenormalform: John Home Betty Home (2,0) Pool (3,0) Inthiscase,Betty'sbeststrategydependsonwhatJohndoes.ButifsheassumesJohnisrational,shewill reasonthathewillnotstayhome,becausegoingtothepoolisadominantstrategyforhim.Knowing this,shecandecidetostayhome(because2>1).Thisiscallediterateddominance.Inthisexample, BettygetshigherutilitythanJohnbecauseoftheirrelativepreferences,andJohngetslessutilitythanhe wouldhaveifBettywantedtobewithhim. Inthisexample,PoolHome(3,0),HomePool(2,1),andPoolPool(1,2)areallParetooptimal outcomes.AnoutcomeisParetooptimal(orefficient)ifnoagentcanbemadebetteroffthanthat outcomewithoutmakinganotheragentworseoff.Theequilibriumoutcomesinboththisexampleand thepreviousoneareParetooptimal. Example4Prisoners'dilemma ConsiderStanandLeland,twoprisonerswhohaveeachbeenofferedadealtoturnstate'switness(defect) againsttheother.Theycan'tcommunicate.Theyhadorginallyagreedtoremaininsolidarity,i.e.not testifyagainsteachother,butsincetheagreementcannotbeenforced,eachmustchoosewhethertohonor it.Ifbothremaininsolidarity,thentheywilleachonlybeconvictedofaminorchage.Ifonlyone defects,thenthestatewillthrowthebookattheotherandletthedefectorgo.Iftheybothdefect,each willgetconvictedofaseriouscharge.Thepayoffmatrix(higherpositiveutilityimpliesabetter outcome)isasfollows:

Leland