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Are people presumed to be logical like Mr. Spock from Star Trek, or can they draw upon their emotions in decision making? Are people presumed to be logical like Mr. Spock from Star Trek, or can they draw upon their emotions in decision making? While our analysis will be an exercise in logic, that does […]

Playing the Gender Pronoun Game 13 can have different information. Thus, the bidder with less wealth may have a better evaluation of the item being auctioned off than the wealthier bidder. One last trait that deserves mention is skill, which is required both in figuring out what to do in a strategic encounter and in

How Do Players Differ? How Do Players Differ? Thus far, we’ve discussed how people are similar: they have well-defined prefer- ences, self-awareness, and a theory-of-mind mechanism. But how do they differ? Three forms of individual heterogeneity are especially relevant to game theory. First, although each person is assumed to have complete and transitive preferences, those

CHAPTER 1: INTRODUCTION TO STRATEGIC REASONING Grace’s Provider Lisa’s Provider Grace’s Utility AT&T AT&T 10 AT&T Verizon 5 AT&T Sprint 5 Verizon AT&T 3 Verizon Verizon 8 Verizon Sprint 3 Sprint AT&T 2 Sprint Verizon 2 Sprint Sprint 6 12 CHAPTER 1: INTRODUCTION TO STRATEGIC REASONING that is relevant to game theory: a person’s capacity

Psychological Profile of a Player 11 and their associated utilities—such as Table 1.3—is known as a utility func- tion. A person’s utility function captures all of the relevant information about the person’s preferences. Writing down a person’s preferences begs the question of where they come from. Why does someone prefer rock and roll to opera?

There is nothing deep about the concept of utility. There is nothing deep about the concept of utility. The idea is that people are endowed with preferences which describe how they rank different alter- natives. If preferences are complete and transitive, then there is a way in which to assign a number to each alternative

PUMPING JACK FOR MONEY What You Have What Jack Has Transaction A and $0 B, C, and $99 A for B and $1 B and $1 A, C, and $98 B for C and $1 C and $2 A, B, and $97 C for A and $1 A and $3 B, C, and $96 A

OUTCOMES WHEN ANGELA CHOOSES AN UNKNOWN CARD AFTER GETTING A KING Identity of Second Number of Pairs for Number of Pairs for Card Chosen Chances Angela on This Round Zack on Next Round King 25% 1 (maybe more) 0 (maybe more) Queen 25% 0 (for sure) 1 (maybe more) 10 50% 0 (for sure) 3

Whetting Your Appetite: The Game of Concentration 5 as steroids is a serious and challenging problem. Why is doping so ubiqui- tous? Is doping inevitable, or can it be stopped? Extinction of the wooly mammoth A mass extinction around the end of the Pleistocene era wiped out more than half of the large mammal species

Infinite Regress in Action 4 CHAPTER 1: INTRODUCTION TO STRATEGIC REASONING store with the same item in stock, we want to know about it. Bring it to our attention, and we’ll gladly beat their price by 10% of the difference.” Although these policies would seem to represent fierce competition, such price-matching guarantees can actually raise