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assurance game
Game-theoretic structure also known as the stag hunt, deriving from Rousseau's example in A Discourse on Inequality. In an assurance game, it is best for everybody, individually and socially, if all ...
backward induction
The process of solving multi-stage decision problems by finding the optimal choice in the final stage conditional on earlier choices, and then working back to the beginning taking one stage at a ...
battle of the sexes
A two-player game that illustrates the gains that can be obtained from coordination and the difficulties of achieving coordination. A typical description of the game involves a husband and a wife who ...
Bertrand competition
Competition between two or more firms in an industry with product price as the strategic variable. This encourages the use of price-cutting as a form of competition. If the products produced by the ...
chicken
A two-person strategic game (1), generally considered to be the prototype of a dangerous game. In its canonical interpretation, two motorists speed towards each other. Each has the option of swerving ...
coordination problem
A situation in which the interests of agents coincide, and the aim is to try to reach an outcome in which those interests are satisfied. Informally, this is a situation in which each person has an ...
equilibrium
A state of balance in a system that is produced and maintained by a variety of forces which may increase or decrease but they always cancel each other out, producing a steady state. See also chemical ...
equilibrium point (in game theory)
Another name for a Nash equilibrium. Often called simply an equilibrium.
evolutionary game theory
The branch of game theory that studies the interaction of non‐rational beings such as animals, or humans whose behaviour evolves under the influence of the environment in which they find themselves. ...
folk theorem
The claim that in an infinitely repeated game any outcome in which each player obtains at least their security pay-off can be an equilibrium (in the sense that there are strategies yielding those ...
game theory
This concerns making rational decisions under uncertain conditions. In geography, game theory is often used to overcome or outwit the environment. A. Dinar et al. (2008) apply game theory to ...
John Nash
(1928 –)Mathematician and economist best known for his contributions to game theory. Nash's interest in games developed at Princeton University, where the two founders of the field, John von ...
maximin
In decision theory and game theory, an alternative or strategy (2) that ensures the best of the worst possible payoffs, thereby maximizing the minimum possible payoff. Thus if there are three ...
minimax theorem
A fundamental result in game theory, establishing that every finite, strictly competitive (two-person zero-sum) game has what later came to be called a Nash equilibrium, provided that mixed ...
multiple equilibrium
The existence of more than one solution to the equations describing the equilibrium of an economic model. The multiple equilibria can be locally unique or there can be a continuum of equilibria. If ...
Nash equilibrium Reference library
Dictionary of the Social Sciences
The basic solution concept of noncooperative game theory. Its current formalization and usage was developed by the economist John
oligopoly
N.Control of a market by a small number of suppliers, which may or may not lead to the operation of a cartel. Compare monopoly.
Pareto efficiency
In economic theory, an alteration in the allocation of resources is said to be Pareto efficient when it leaves at least one person better off and nobody worse off. A state of Pareto optimality occurs ...
prisoner's Dilemma
The best-known example from game theory, which illustrates how people behave in strategic situations. The Prisoner's Dilemma is based on some version of the following situation: two men have been ...
punishment strategy
A strategy used in a repeated game to secure an outcome which is not a Nash equilibrium for a single play of the game. Consider the prisoners' dilemma. The outcome {Don't confess, Don't confess} is ...
