Nash Equilibrium: Baek, Yongjoo

Meaning of Nash Equilibrium Examples of Nash Equilibrium Mixed Strategy Nash Equilibrium
Nash Equilibrium
Baek, Yongjoo
November 28, 2006
Baek, Yongjoo
Nash Equilibrium
A Beautiful Mind
Baek, Yongjoo
Nash Equilibrium
Outline
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Meaning of Nash Equilibrium What is Nash Equilibrium? Where is Nash Equilibrium? Examples of Nash Equilibrium Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors Mixed Strategy Nash Equilibrium What is Mixed Strategy Nash Equilibrium? Application of Mixed Strategy Nash Equilibrium
Baek, Yongjoo
Nash Equilibrium
What is Nash Equilibrium? Where is Nash Equilibrium?
Meaning of Nash Equilibrium

At a Nash equilibrium point,
Baek, Yongjoo
Nash Equilibrium

At a Nash equilibrium point, Players Strategies 1 S1 2 S2 . . . . . . i Si . . . . . . n Sn Players Strategies 1 S1 2 S2 . . . . . . i Ti . . . . . . n Sn
Nash Equilibrium
No More Prot for Player i
Baek, Yongjoo
Nash Equilibrium

At a Nash equilibrium point, Players Strategies 1 S1 2 S2 . . . . . . i Si . . . . . . n Sn Players Strategies 1 S1 2 S2 . . . . . . i Ti . . . . . . n Sn
Nash Equilibrium
No More Prot for Player i
No player can gain more by changing only his/her strategy.

Baek, Yongjoo Nash Equilibrium
Finding Nash Equilibrium Points in a 2-person Game

Choice 1 a11 , b11 . . . ai1 , bi1 . . . am1 , bm1 ... ... .. . ... .. . ... Choice j a1j , b1j . . . aij , bij . . . amj , bmj ... ... .. . ... .. . ... Choice n a1n , b1n . . . ain , bin . . . amn , bmn
Choice 1 . . . Choice i . . . Choice m
Table: Choices of A and B, and Corresponding Prots
Baek, Yongjoo
Nash Equilibrium

Given a Nash equilibrium point at (i, j),
Baek, Yongjoo
Nash Equilibrium


aij is the maximum of the column.
Baek, Yongjoo
Nash Equilibrium


aij is the maximum of the column. bij is the maximum of the row.
Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors
Prisoners Dilemma
Two suspects of a crime are interrogated by the police.
Baek, Yongjoo
Nash Equilibrium
Prisoners Dilemma
Two suspects of a crime are interrogated by the police. The suspects are isolated from each other.
Baek, Yongjoo
Nash Equilibrium
Prisoners Dilemma
Two suspects of a crime are interrogated by the police. The suspects are isolated from each other. Stay Silent -1, -1 0, -4 Betray -4, 0 -2, -2
Stay Silent Betray
Table: Years to serve in Prison
Baek, Yongjoo
Nash Equilibrium
Prisoners Dilemma
Two suspects of a crime are interrogated by the police. The suspects are isolated from each other. Stay Silent -1, -1 0, -4 Betray -4, 0 -2, -2
Stay Silent Betray
Table: Years to serve in Prison
Both suspects betray!
Baek, Yongjoo
Nash Equilibrium
Hawk-Dove Game
Two players compete for a limited resource.
Baek, Yongjoo
Nash Equilibrium
Hawk-Dove Game
A hawk physically attacks its opponent.
Baek, Yongjoo
Nash Equilibrium
Hawk-Dove Game
A hawk physically attacks its opponent. A dove uses threat but avoids ght.
Baek, Yongjoo
Nash Equilibrium
Hawk-Dove Game
Hawk Dove
Hawk -1, -1 0, 2
Dove 2, 0 1, 1
Table: What Hawk and Dove gain
Baek, Yongjoo
Nash Equilibrium
Hawk-Dove Game
Hawk Dove
Hawk -1, -1 0, 2
Dove 2, 0 1, 1
Table: What Hawk and Dove gain
Each player wants to do the opposite of what the other player does.
Choosing Sides
Two cars meet on a narrow road.
Baek, Yongjoo
Nash Equilibrium
Choosing Sides
Two cars meet on a narrow road. Each car can swerve to the left or to the right.
Baek, Yongjoo
Nash Equilibrium
Choosing Sides
Two cars meet on a narrow road. Each car can swerve to the left or to the right. Left 0, 0 -1, -1 Right -1, -1 0, 0
Left Right
Table: Where to turn?
Baek, Yongjoo
Nash Equilibrium
Choosing Sides
Two cars meet on a narrow road. Each car can swerve to the left or to the right. Left 0, 0 -1, -1 Right -1, -1 0, 0
Left Right
Table: Where to turn?
Drivers want to cooperate to avoid collision.
Baek, Yongjoo
Nash Equilibrium
Rock, Paper, Scissors
Rock Paper Scissors
Rock 0, 0 1, -1 -1, 1
Paper -1, 1 0, 0 1, -1
Scissors 1, -1 -1, 1 0, 0
Table: Prot Distribution of a Rock, Paper, Scissors Game
Baek, Yongjoo
Nash Equilibrium
Rock Paper Scissors
Rock 0, 0 1, -1 -1, 1
Paper -1, 1 0, 0 1, -1
Scissors 1, -1 -1, 1 0, 0
No Nash Equilibrium points.
Baek, Yongjoo
Nash Equilibrium
Rock Paper Scissors
Rock 0, 0 1, -1 -1, 1
Paper -1, 1 0, 0 1, -1
Scissors 1, -1 -1, 1 0, 0
No Nash Equilibrium points. Unable to predict the behavior of the opponent.
Baek, Yongjoo
Nash Equilibrium
What is Mixed Strategy Nash Equilibrium? Application of Mixed Strategy Nash Equilibrium
Mixed Strategy Nash Equilibrium

Pure Strategy
Each player chooses one strategy with probability 1 at each move.
Baek, Yongjoo
Nash Equilibrium

Pure Strategy
Mixed Strategy
Each player chooses randomly among possible strategies according to a probability distribution.
Baek, Yongjoo
Nash Equilibrium

Pure Strategy
Mixed Strategy
At a Mixed Strategy Nash Equilibrium point,
Baek, Yongjoo
Nash Equilibrium

Pure Strategy
Mixed Strategy

At least one player is playing mixed strategies.
Baek, Yongjoo
Nash Equilibrium

Pure Strategy
Mixed Strategy

At least one player is playing mixed strategies. Nothing is gained by changing ones probability distribution.
Baek, Yongjoo
Nash Equilibrium

Pure Strategy
Mixed Strategy

At least one player is playing mixed strategies. Nothing is gained by changing ones probability distribution.
The general concept of Nash equilibrium includes mixed strategy Nash equilibrium. Nashs Theorem
There exists a Nash equilibrium in every nite, noncooperative games of two or more players.
Evolutionarily Stable Strategy

Generalized Hawk-Dove Game
Baek, Yongjoo
Nash Equilibrium

R(esource) < C(ost of ght)
Baek, Yongjoo
Nash Equilibrium

Hawk Dove
Hawk (R C)/2, (R C)/2 0, R
Dove R, 0 R/2, R/2
Baek, Yongjoo
Nash Equilibrium

Hawk Dove
Hawk (R C)/2, (R C)/2 0, R
Dove R, 0 R/2, R/2
The mixed Nash equilibrium point is at (R/C Hawk, (1 R/C) Dove). The population composition (R/C Hawk, 1 R/C Dove) is evolutionarily stable.
Baek, Yongjoo
Nash Equilibrium
Epilogue
Governing Dynamics of a Blonde and Two Suitors Blonde 0, 0 1, 2 Friend 2, 1 1, 1
Blonde Friend
Baek, Yongjoo
Nash Equilibrium

Nash Equilibrium: Baek, Yongjoo

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Meaning of Nash Equilibrium Examples of Nash Equilibrium Mixed Strategy Nash Equilibrium

November 28, 2006

What is Nash Equilibrium? Where is Nash Equilibrium?

Meaning of Nash Equilibrium

What is Nash Equilibrium? Where is Nash Equilibrium?

Meaning of Nash Equilibrium

No More Prot for Player i

What is Nash Equilibrium? Where is Nash Equilibrium?

Meaning of Nash Equilibrium

No More Prot for Player i

No player can gain more by changing only his/her strategy.

What is Nash Equilibrium? Where is Nash Equilibrium?

Finding Nash Equilibrium Points in a 2-person Game

Choice 1 . . . Choice i . . . Choice m

Table: Choices of A and B, and Corresponding Prots

What is Nash Equilibrium? Where is Nash Equilibrium?

Finding Nash Equilibrium Points in a 2-person Game

Choice 1 . . . Choice i . . . Choice m

Table: Choices of A and B, and Corresponding Prots

Given a Nash equilibrium point at (i, j),

What is Nash Equilibrium? Where is Nash Equilibrium?

Finding Nash Equilibrium Points in a 2-person Game

Choice 1 . . . Choice i . . . Choice m

Table: Choices of A and B, and Corresponding Prots

Given a Nash equilibrium point at (i, j),

What is Nash Equilibrium? Where is Nash Equilibrium?

Finding Nash Equilibrium Points in a 2-person Game

Choice 1 . . . Choice i . . . Choice m

Table: Choices of A and B, and Corresponding Prots

Given a Nash equilibrium point at (i, j),

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Stay Silent Betray

Table: Years to serve in Prison

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Stay Silent Betray

Table: Years to serve in Prison

Both suspects betray!

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Table: What Hawk and Dove gain

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Table: What Hawk and Dove gain

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Table: Where to turn?

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Table: Where to turn?

Drivers want to cooperate to avoid collision.

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Rock, Paper, Scissors

Rock Paper Scissors

Table: Prot Distribution of a Rock, Paper, Scissors Game

Prisoners Dilemma Hawk-Dove Game Choosing Sides Rock, Paper, Scissors

Rock, Paper, Scissors

Rock Paper Scissors

Table: Prot Distribution of a Rock, Paper, Scissors Game

No Nash Equilibrium points.