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POLSC 135 1st Edition Lecture 6 Outline of Last Lecture: Introduction to Politics, Game Theory. Outline of Current Lecture: Game Theory cont. Current Lecture:I. Game Theory Cont. -Rational Behaviors involve: - Complete information. - Preference Ranking- If A is preferred to B, and B is preferred to C, then A is preferred to C.- Choice: the highest payoff with the lease possible cost. - Strategic situation: the choice of one actor depends on the choices made by other actors. - There are 3 types of “games” - Extensive game: Players make their choices sequentially (topic 3)- Normal/strategic game: players make their choices simultaneously (topic 4) - Extensive form game has nodes: - Choice node: A point in this game at which a player must make an action. - Initial node: the place where the game begins.- Terminal node: where the game ends. - Branches: represent the actions that can be taken at choice nodes. - An important solution concept for games is a Nash equilibrium. - A Nash equilibrium is a set of strategies (one for each player) such that no player has an incentive to unilaterally switch to another strategy. - Games have rules about how decisions are made. The basic rule is that players choose to do what they believe is in their best interest. - Games can be represented by a game tree or by a payoff matrix. ***NOTE*** The following example is the exact same from the last lecture. We just went over it again nowthat we have all additional information regarding game theory. -Game Theory Example: These notes represent a detailed interpretation of the professor’s lecture. It is best used as a supplement to your own notes, not as a substitute.- Say for example that a citizen lives within a state. The state decides to raise taxes. The following chart below is a representation of how the citizen may react. - Presumptions: The state starts with 1 (representing tax income). -Key: L = Loyal, E= Exit, V=Voice. 1 = taxes. C=Cost. (Citizen;State)End Lecture.Loyal (0-C; 1+L)CitizenIgnoreStateCitizenVoiceExit (E-C; 1)Respond (1-C;L)Loyal (L; 1+L)Exit (E; -1) [state


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