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 now that 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 Loyal 0 C 1 L Voice Citizen Loyal L 1 L Exit E 1 state loses End Lecture State Ignore Citizen Exit E C 1 Respond 1 C L
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