CMU 15-251 Game theory Teachers: Anil Ada Ariel Procaccia (this time)
Normal-Form Game β’ π = {1, β¦ , π} o π o π£ π : π π β β π β π o j β π π‘ π β π π π£ π (π‘ 1 , β¦ , π‘ π ) β’ 2
One day your cousin Ted shows up. His ice cream is identical! Selling ice cream at the beach. You split the beach in half; you set up at 1/4. 50% of the customers buy from you. 50% buy from Teddy. One day Teddy sets up at the 1/2 point! Now you serve only 37.5%! 3
The Ice Cream Wars β’ π = 1,2 π‘ π +π‘ π , π‘ π < π‘ β’ π = [0,1] π 2 π‘ π +π‘ π β’ π£ π π‘ π , π‘ π = 1 β , π‘ π > π‘ π 2 1 2 , π‘ π = π‘ π β’ 4
The prisonerβs dilemma β’ β’ o o β’ 5
The prisonerβs dilemma 6
In real life β’ o o β’ o o β’ o o 7
On TV 8
The professorβs dilemma 9
Nash equilibrium β’ β’ π = π‘ 1 β¦ , π‘ π β π π β² β π, π£ π π β₯ π£ π (π‘ π β² , π βπ ) βπ β π, βπ‘ π π βπ = π‘ 1 , β¦ , π‘ πβ1 , π‘ π+1 , β¦ , π‘ π 10
Nash equilibrium β’ 0 1. 1 2. 2 3. 3 4. 11
Nash equilibrium 12
Russel Crowe was wrong 13
End of the Ice Cream Wars Day 3 of the ice cream wars⦠Teddy sets up south of you! You go south of Teddy. Eventually⦠14
15
Does NE make sense? {2, β¦ , 100} β’ β’ π‘ π’ π‘ < π’ β’ π‘ + 2 π‘ β 2 β’ 16
Back to prison β’ β’ = β’ 17
Anarchy and stability β’ β’ β’ = o = o 18
Example: Cost sharing β’ π π» π‘ 1 π‘ 2 1 1 π π‘ π π’ π β’ π‘ π β π’ π π π π β’ 10 10 10 β’ 1 1 β’ π’ 1 π’ 2 19
Example: Cost sharing π β’ π π‘ 1 β’ β’ β β₯ π π 1 β€ π β’ o π’ o 20
Example: Cost sharing 1 β’ 2 β’ 0 0 0 π β¦ π‘ 1 π‘ 2 π‘ π 2 β’ 2 1 1 1 β’ π’ 21
Example: Cost sharing = 2 β’ β’ 0 0 0 β’ β β¦ π‘ 1 π‘ 2 π‘ π 2 β’ 1 1 1 1 2 π π’ 22
Potential games β’ π Ξ¦: π=1 π π β β π π β π=1 π β π π π β² β π π π‘ π β² , π βπ β cost π π = Ξ¦ π‘ π β² , π βπ β Ξ¦(π) cost π π‘ π β’ 23
Potential games * β’ β’ π π π π π o o π π (π) π π Ξ¦ π = π π π=1 π π o π π π +1 π π Ξcost π = ΞΞ¦ β π π π 24
Potential games * β’ π(log π) β’ o π β€ Ξ¦ π β€ πΌ π β cost(π) π β Ξ¦ o π β o π β β€ Ξ¦ π β β€ Ξ¦ OPT o β€ πΌ π β cost(OPT) β 25
Cost sharing summary β’ β π , cost π β€ π β cost(OPT) o β π cost π β€ πΌ π β cost(OPT) o β’ β π cost π β₯ π β cost(OPT) o β π , cost π β₯ πΌ π β cost(OPT) o 26
What we have learned β’ o o o o o β’ ο o 27
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