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Game Theory

Attribution Non-Commercial (BY-NC)

0 оценок0% нашли этот документ полезным (0 голосов)

12 просмотров10 страницGame Theory

Attribution Non-Commercial (BY-NC)

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I

2 '\1

'2

()

4 :1 :1 8

"j 3 2

FIGURE 7.3 A game tree wilh a '\lmnIllY" player.

7 0 2

<1

:1

The precedence relation, together with the way in which players are assigned

to nodes, describes the way in which the game unfolds. For example, in Figure 7.3

player I is assigned to the root, so i (xo) = I. His action set at the root, AI (xo), includes

two choices that determine whether the game will terminate at node X4 with payoffs

(2,0, 4, 3), or whether player 2 will gel to play at node xI' Player 2 then can choose

whether player 4 will play at or x3, and at each of these nodes player 4 has two

choices that both end in termination of the game. Player 3 has no moves to make.

2

There is still one missing component: how do we describe the knowledge of each

player when it is his turn to move? In Figure 7.3 we sec that player 2 moves after

player I. Would player 2 know what player I did? In this example we would think

the answer should be obvious: if player 1 chose his other action, the game would end

and player 2 would not have the option of choosing an action. Moving down the game

tree to player 4, however, raises some questions. It seems implicit in the way we drew

the game tree in Figure 7.3 that player 4 knows what happened before he moves, that

is, if he is at node X2 or at node X3' Hence if player 4 knows where he is in the game

tree then he must know what player 2 did before him.

Perhaps the game that is played actually calls on player 4 to make his move without

knowing what player 2 did at Xl' How can we describe this situation in a game tree?

Clearly we need to find a way to represent the case in which player4 cannot distinguish

between being at x2 and being at x3' That is, we need to be able to make statements

like "I know that I am at either X2 or X3, but I don't know at which of the two I am."

We proceed to put structure on the information that a player has when it is his turn

to move. A player can have very fine information and know exactly where he is in

the game tree, or he may have coarser information and not know what has happened

before his move, therefore not knowing exactly where he is in the game tree. We

introduce the following definition:

2, Note that the moves from any nontenninal node result in a move to another node in the game. Thus

we can save on notation and give moves "names" that are consistent with the nodes in which they

will result. For our current example we could write A I (xo) {xj, x4}, A

2

(Xl) {x2, x3}, A

4

(x2) =

{xs, x61, and A

4

(x3) {x7, Xg}.

7.1 'fllc Exlcllsivl:hmn(lame T.E) 4>

()

()

I

o 2 o 2

FIGURE 7.4 'rhesimultaneous-moveBattleoftheSexesgame.

Definition 7.2 Every player i has a collection of information sets hi E Hi Ihal

partitionthenoder;of/hegameatwhichplayeri moveswiththefollowingproperties:

1. Ifhi is asingletonthatincludes only x then playeri who moves at x knowr;

thatheis atx.

2. If x I=- Xl andifbothx E hi andXl E hi thenplayeri whomovesatx doesnot

know whetherheis atx orXl.

3. Ifx I=- Xl andifbothx E hi andXl E hi then A;(x') Ai(x).

Theformaldefinitionbuildsonasimpleidea.Considerthesequential-moveBattle

ofthe Sexes gamein Figure7.2 and observe thatplayer2 moves atXl' We wantto

describewhetherornotheknowsthatheisatXl'Ifwewrite112 = [Xl}'thismeansthat

the information setat Xl is asingleton (itincludes only the nodeXl)' Henceplayer

2 has information that says "} am atxJ," which is captured by property (1) ofthe

definition. In this caseit will follow thatplayer2will haveanotherinformationset,

h; = {x2}'

If, in contrast, we want to represent a game in which player 2 does not know

whetherheis atXI orx2, then itmustbethecasethathis informationis "1 knowthat

IamateitherXl orX2, butIdon'tknowatwhichofthetwoIam."Thuswewill write

h2 {Xl> x2}, whichexactlymearisthatplayer2cannottellwhetherheis atXl orX2'

Thisis theessenceofproperty(2) ofthedefinition.

Finally,property(3)isalsoessentialtomaintainthelogicofinformation.If instead

X E hi andx' E hi butAi (x') Ai (x), thenbythemerefactthatplayeri hasdifferent

actions from which to choose at each ofthe nodes X and x', he should be ableto

distinguish betweenthesetwo nodes. Itwouldthereforebe illogical to assume that

hecannotdistinguishbetweenthem.

Wearelefttoconstructagraphicalrepresentationtoshowwhichnodesbelongin

thesameinformationset.InFigure7.4wepresentthetwocommonwaysofdepicting

this using theextensive-formrepresentationofthesimultaneous-moveBattleofthe

Sexesgamethatwehavealreadyseenandanalyzed.Player1choosesfromtheaction

setAl= {O, F}, andplayer2choosesfromA2 = {o, n, without observing thechoice

ofplayer 1. On theleftsideofFigure7.4weuseanellipsetodenotean information

set, andall thenodesthatareinthesameellipsebelongtothesameinformation set.

Inthisexampleplayer2cannotdistinguishbetweenXl andX2, sothath2 {Xl, X2}'

OntherightsideofFigure7.4isanothercommonwayofdepictinginformationsets,

accordingtowhichthedashedlineconnectingXl withX2 denotesthatbothareinthe

sameinformationset. Anotherexampleofasimultaneous-movegamedepictedas a

136 ... (:lWpltT 7 Preliminaries

R // P

2

o --J o -J -J o

o o -I o

FIGURE 7.5 Game tree of rock-paper-scissors.

game tree is the game of depicted in Figure In this game

player J chooses from the set A I {R, P, S} while player 2 chooses from the set

A2 /r, p, s}, without ohserving the choice made by player I.

7.1.2 Imperfect versus Perfect Information

We defined games of complete in Chapter 3 as the situation in which

each player i knows the action set and the pay01T function of each and every player

.i N, and this itself is common knowledge. This definition sufficed for the normal-

form representation. For extensive-form games, however, it is useful to distinguish

between two different types of complete-information games:

Definition 7.3 A game of complete information in which every information set is a

singleton and there are no moves of Nature is called a game of perfect information.

A game in which some information sets contain several nodes or in which there are

moves of Nature is called a game of imperfect information.

In a game of perfect information every player knows exactly where he is in the

game by knowing what occurred before he was called on to move. Examples would

be the trust game in Figure 7.1 and the sequential-move Battle of the Sexes game

in Figure 7.2. In a game of (complete but) imperfect information some players do

not know where they are because some information sets include more than one node.

This happens, for example, every time they move without knowing what some players

have chosen previously, implying that any game is a game of

imperfect information. Examples include the simultaneous-move Battle of the Sexes

game shown in Figure 7.4 and the rock-paper-scissors game depicted in Figure 7.5.

Games of imperfect information are also useful to capture the uncertainty a player

may have about acts of Nature. For example, imagine the following card game: There

is a large deck that includes an equal number of only kings and aces, from which

player 1 pulls out a card without looking at it. The probability of getting a king is 0.5,

and we can think of this as Nature's move. Hence player 1 moves after Nature and

does not know if Nature chose a king or an ace. After drawing the card, player 1 can

call (C) or fold (F). If he folds, he pays $1 to player 2. If he calls, he pays $2 to player

2 if the card is a king, while player 2 pays him $2 if the card is an ace.

We can accurately describe this game in one of the two ways depicted in Figure 7.6.

To see this, consider the game tree in the left panel. The order of appearance is loyal

to the story: N atme chose K or A. Player 1 docs not know what happened, but he

knows that he is at either node in his information set with probability i. Then player

1 makes his move and the game ends. The game on the right looks different but is

SI r:ilcgies and Nash Equilibriulll "131

N

c F

2

FIGURE 7.6 A card game.

strat.egically equivalent. Player I makes his move (C or F) without knowing which

card was drawn, and then Nature draws the card, K or A, with equal probability.

Therefore in both games we are depicting exactly (he same information and moves,

ami hence we are geUing the story right.)

Therc is an insight worth emphasizing here. A game will be one of impcrl'ecl

information when a player must make a move either without knowing the move 01'

another player or without knowing the realization or a choice of Nature. Uncertainly

over the choice of Nature, or exogcnous ullccrtainty, is at the heart of the si ngle

person decision problems that were described in Chapter 2. (And the card game

in Figure 7.6 is effectively a decision problem because player 2 has

no choices to make.) Uncertainty over the choice of another player, or endogenous

uncertainty, is the subject of games like the simultaneous-move

Battle of thc Sexes game in Figure 7.4. Notice, however, that both situations share

a common feature: occurrences that some player does not know are captured by

uncertainty over where he is in the game, be it from exogenous or endogenous

uncertainty. In either case a player must form beliefs about the unobserved actions,

of Nature or of other players, in order to analyze his situation.

Strategies and Nash Equilibrium

Now that we have the structure of the extensive-form game well defined, and have

developed game trees to represent this structure, we move to the next important step

of describing strategies. Recall that in Section 3.1 we argued that "a strategy is often

defined as a plan of action intended to accomplish a spec{jic goal." In the

form game it was very easy to define a strategy for a player: a pure strategy was

some element from his set of actions, Ai' and a mixed strategy was some probability

distribution over these actions. As we will now see, a strategy is more involved in

extensive-form games.

7.2.1 Pure Strategies

Consider the Battle of the Sexes game described again in Figure 7.7.

(We will now seldom include the names of nodes in our game trees because they have

... ...... ---

3. This is the reason that the definition of games of perfect or imperfect information explicitly requires

the reference to moves of Nature. It is sometimes possible to include them in a game tree in which

all the information sets are singletons.

'138 .. Clwpler7

() F

2 2

2 o o

o o 2

FIGURE 7.7 The Battleofthe Sexesgame.

norealconsequencefortheissllcswithwhichweareconcerned.)Player] hasasingle

information scI with one node, sofor him a purestrategy is as simple as "play 0"

or"play F."Forplayer2, however, thingsarea bitmoreinvolved. Player2 has two

information sets, each associated with a difrerentactionofplayer 1. Hence the two

simplcstalements"play0"and"playf" donot seem toexham;tall thepossibilities

forplayer2. In particular,player2canchoosethefollowingratherattractivestrategy:

"Ifplayer I plays 0 then 1will play0, whilcifplayer I plays F thenI willplay f."

This simpleexample demonstrates that when a player's move follows aftcrthe

realizationofpreviollsevents in thegame,and iftheplayercan distinguishbetween

thesepreviollsevents(Lhey resultin differentinformationsets),thenhecancondition

his behavior011 theevents thathappened. A strategyis thereforeno longera simple

statement ofwhataplayerwill do,asinthenormal-formsimultaneous-movegame.

Instead wehave

Pure Strategies in Games A pure strategy for player i is a

completeplan that describes whichpureaction playeri willchooseateach

ofhis informationsets.

If we consider the simultaneous-move Battle ofthe Sexes game in Figure 7.8,

the pure strategies for player I are Sj = {O, F}, and those for player 2 are S2

{o, fJ. Becauseeachplayerhasonlyoneinformationset,theextensive-formgameis

identicaltothesimplenormal-formgamewehavealreadyencountered.Incontrast,in

thesequential-moveBattleoftheSexesgameinFigure7.7,player2hastwodistinct

information setsin whichhecanchoose() or f,eachinformationsetresultingfrom

the previously made choice ofplayer 1. Thereforea "completeplan ofplay" must

accommodatea strategy that directs what player 2 will choose for each choice of

o F

2 o o

1 o o 2

FIGURE 7.8 Thesimultaneous-moveBattleoftheSexesgame.

7.2 Strategies "lid Nash EqllilihriulIl "139

player I. 'fhat is, player 2' s c1lOice or nel iOll "rom the set I0, I J can he Ilwde

on what player I does, Udlllillillg Ilie possibility oCtile fOlTn "Ifplaycr I

plays 0 thell J will play 0, wilile if player I plays F thell I will play f."

}"or this example, we can describe the set of pure strategies for p!;lyer 2 as follows:

,)'2 {00, oI, fo, .II},

where a pure strategy "ah" is shorthand for "I will playa if player I plays 0 and I

wi II pJ ay h if he plays F." r;'or player I the pure strategy set remaills S1'= {O, F}.

We now introduce some notation that builds on what we have already developcd

in order to define formally a pure strategy. Let Hi be the collection of all informalion

sets at which player i plays, and let hi E Hi be one of i 's information sets. Let Ai (hi)

be the actions that player i can take at hi, and let Ai be the set of al I actions of pI ayer

i, Ai = U

h

.

0

l/A

i

(h

i

) (i.e., the union of all the elements in all the sets Ai(h

j

. We can

I . I

now define a pure strategy as follows:

Definition 7.4 A pure strategy for player i is a mapping .}'j : Ai that assigns

an action siehl) E Ai(h;) for every information set hi E Hi' We denote by Si the scI

of al1 pure-strategy mappings Sf E Si'

A final point is in order, and the sequential-move Battle of the Sexes game ill

li'igure 7.7 is useful to illustrate it. Notice that even though player 2 has only two

actions from which to choose, by moving after observing what player J has chosen,

his strategy defines actions that are conditional on his information about where he is

in the game. In this example the two actions translate into four pure strategies because

he has two information sets.

This observation implies that a potentially small set of moves can translate into a

much larger set of strategies when sequential moves are possible, and when players

have knowledge of what preceded their play. In general assume that player i has k > ]

information sets, the first with m J actions from which to choose, the second with IIl2'

and so on until Ink' Letting lSi I denote the number of clements in Si' the total number

of pure strategies player i has is

lSi 1= m I x m2 x ... x mk

For example, a player with 3 information sets, 2 actions in the first, 3 in the second,

and 4 in the third will have a total of 24 pure strategies.

7.2.2 Mixed versus Behavioral Strategies

Now that we have defined pure strategies, the definition of mixed strategies follows

immediately, just like in the normal-form game:

Definition 7.5 A mixed strategy for player i is a probability distribution over his

pure strategies Si E Sf

How do we interpret a mixed strategy? In exactly the same way that we did for

the normal form: a player randomly chooses between all his pure strategies-in this

case all the complete plans of play-and once a particular plan is selected the player

follows it.

You may notice that this interpretation takes away some of the dynamic flavor

that we set out to capture with extensive-form games. More precisely, when a mixed

140 ~ ChaplDI' 7 Pre! illlillaric:-;

slr:licgy is used, the player selecls (I plan randolllly he/ore the gallic is played and (hen

rollows a jJ(/rticular pure strategv.

This description of mixed :-;Iralcgies wa:-; scn:-;iblc for nonnal-form games hecause

there it was a oncc-and-for-all choice to be macle. In a game trec, however, fhe

player may want to randomize at i-lomc nodes, independently of what he did al curlier

nodes. In other words, tbe player may wanl 10 "cross the bridge when he gels there."

This cannot be captured by mixed i-llrategies as previously deflned because oncc the

randomizal ion is over, the player is choosing a pure plan of action.

To illustrate this point, consider again the sequential-move Battle of the Sexes

game in Figure 7.7. The previous delinition of a mixed strategy implies thai player 2

can ntndOlnil',e among any of his four pure strategies in the set S2 ={oo, of, fo, ffl.

It does not, however, allow him to choose strategies of the form "If player J plays 0

then l' II play f, whi le if he plays F then J'II mix and play f with probability 1."

To allow for strategies that let players randomize as the game unfolds we define a

lIew concept as follows:

Definition 7.6 A bclutvioral strategy speeifjes for each information set hi Hi

an independent probability distribution over A;(h

i

) and is denoted by (Ji : Hi ...-+

6A;Ch

i

), where (J;(0i(h

i

is the probability that player i plays action ai(h

i

) E Ai(h

i

)

in information set hi'

Arguably a behavioral strategy is more in tune with the dynamic nature of the

extensive.form game. When u::;ing sllch a strategy, a player mixes among his actions

whenever he is called to play. This differs from a mixed strategy, in which a player

mixes before playing the game but then remains loyal to the selected pure strategy.

Luce and Raiffa (1957) provide a nice analogy for the different strategy types we

have introduced. A pure strategy can be thought of as an instruction manual in which

each page tells the player which pure action to take at a particular information set, and

the number of pages is equal to the number of information sets the player has. The

set Si of pure strategies can therefore be treated like a library of such pure-strategy

manuals. A mixed strategy consists of choosing one of these manuals at random and

then following it precisely.

In contrast a behavioral strategy is a manual that prescribes possibly random

actions on each of the pages associated with play at particular information sets.

To see this, consider the sequential-move Battle of the Sexes game in Figure 7.9.

Player 2 has two information sets associated with the nodes XI and X2, which we

denote hf and hf, respectively, and in each he can choose between two actions

in A2 = {o, fl. A pure strategy would be an element from S2 {oo, of, fo, .tf}

A mixed strategy would be a probability distribution (Poo' Pof, Pro' Pff)' where

PS

2

2: 0 and P

oo

Pol Pro Pff = 1. Denote a behavioral strategy as four prob-

abilities, (J2(0(hf, (}2(f(hf, (J2(0(hf, and (}2(f (hf", where (J2(0(hf +

(J2CfChf = (J2(o(hf) (J2Cf(hD) = 1. In Figure 7.9 we have used (}2(0(hf =

1, (}2Cf(hf = ~ and (J2(o(hf = (J2Cf(hn) = i

Having defined two kinds of nonpure strategies, the obvious question is whether

we need to consider both kinds of strategies for a complete description of possible

behavior, or whether it suffices to consider only one kind or the other. We can

answer this question by answering two complementary questions. The first is, given

a mixed (not behavioral) strategy, can we find a behavioral strategy that leads to

the same outcomes? Using our example, can we replace a mixed strategy of the

7,2 Strategic:; :IIHI Nash Eqllilihriulll ..14')

()

2

() 2

FIGURE 7.9 Behavioral strategies in the sequential,move Battle of the Sexes game.

form (POII' Pol' PIlI' PJJ) with L'\'ES, P,I = ) with a behavioral strategy of the fonn

(o'2(o(hf, o'2(f(h2)), a;(f(h.n that leads to the same randomization

over outcomes?

The answer is yes, which is quite easy to sec. Conditional on reaching xI t.he

probability or playing () is Pr(oIO} :::::: p()o+- Pof" and conditional on reaching

XI the probability of playing f is Pr{fIO} Plo+ Pff' so that Pr{oIO}

PrUIO} I. Sirnilarly, conditional on reaching X2 the probability of playing

() isPr{olF} = Poo -+ Pro' and the probability of playing f is Pr{IIP'}:::c:::

Pof + Prt" so that Pr(ol F} + Pr{flF} = 1. 'I'hus we can define a behavioral strat,

egy (}2(a2(h)) Pr{a2Ih) that yields the same randomization as the mixed strategy

(Poo' Pol' Pfli' PfI)'

The complementary question is whether, given a behavioral strategy, we can

find a mjxed strategy that leads to the same outcomes. Again, turn to the example

as an illustration and consider the behavioral strategy shown in Figure 7.9, where

0"2(0(0 1, a2(f(0 = and a2(0(F a2(f(F Notice that if the

player lIses a mixed strategy (Poo' Pol' Pill' Plf) then conditional on player I choos-

ing 0, action 0 will be chosen with probability }J()O + Pol' and action f will be chosen

with probability Pro Po' Similarly, conditional on player I choosing action ()

will be chosen with probability Poo + Pro' and action f will be chosen with prob-

ability PoI VII' 'I'hus to replicate the behavioral strategy, four equalities must be

satisfied by the mixed strategy (1'00' Pol' Pro' Plf):

1

Pr {oIO} = P00

Pof = 3'

Pr{fIO} = Pro +PtJ =

1

Pr{oIF} = Poo + Pfo

2:

1

Pr{f IF) = Pot

PIt = 2'

It may seem like we have four equations with four unknowns, but this system

of equations is "underidentified" because these four equations are really only two

equations. By definition it must be true that

Poo + Pol + I' fo PIf = 1,

141 .. ('Iwplcr 7 Preliminaries

wllich lllal h:lvC oilly equations wilh four It follows that

/I/(/II.\, vahlcs ur (1'00' PoI' I) PO) wi II satisfy the equHl iOIlS, j Illpl ying that this par-

behavioral slrategy can be generated by all inllllile IlIlmber of different mixed

strategies. hll' exalllple, (1'00' Pol' Pro' PII) 0,0, /)' will lead 10 equivalent

outcollles as the bdwvionli slralegy, but so will (Poo, Pol' 1'/0,1'/1) - (A,

This example may suggest Illat any randomization over play can be represented

hy eilher l1lixed or belwviOr:lI slrategies. As it turns OUI, lhis is true under a rather

mild condition.

Definition 7.7 A gamc or I}('I:/,ect recall IS one 111 which no player ever forgets

information that previollsly knew.

Thai is, a game of perfect recall is one in which, jf a player is called upon to

move more Ihan ollce in a gnmc, then he must reITlember the moves that he chose in

his prcvious information sets. Practically all of the analysis in game theory, and in

applications of game theory to the social sciences, assurnes perfect recall, as will we

in Ihis text. For the class of perfect-recall games, Kuhn (J (53) proved that mixed and

behavioral strategies arc equivalent, in the sense that given strategies of i 's opponents,

the same distribution over outcomcs can be generated by either a mixed or a behavioral

strategy of player i.

Remark (The Absent-Minded Driver) Despite our focus on games of perfect recall,

it may be interesting to dwell for a momcnt on the example of the "absent-minded

driver" that was introduced by Piccione and Rubinstein (1997) to depict a simple game

(in fact, a single-person decision problem) with imperfect recalL The story goes as

follows. An absent-minded driver is driving home along the highway. The first exit

on the road, exit I, takes him to a bad neighborhood, yielding him a payoff of O. Exit

2, farther down the road, is the best route to his home, yielding him a payoff of 4.

If he misses exit 2 then he will eventually get home the long way, yielding him a

payofT of 1 . Imperfect recall means that he cannot distinguish between exits 1 and 2

and therefore cannot remember whether he has already passed one exit or not. This

decision problem is depicted in Figure 7.10. Define a "planning" mixed strategy of

the player as a probability p that he will exit at any exit he passes (both nodes in

his single information set)-that is, the probability that the driver will commit to exit

when be is at an intersection. His expected payoff from this strategy is Op +4p(1 -

p) 1(1 p)2 2p + I, which is maximized at p As Piccione and

Rubinstein argue, a puzzle emerges once the driver finds himself at an intersection.

He knows that with some probability q he is at Exit J, and with some probability

(1 - q) he is at exit 2. The driver's payoff for choosing to exit with probability p is

now, at the intersection, q[4p(1- p) + 1(1 - p)2] + (1 q)(4p 1(1 p)], which

is equivalent to the planning problem only when q = 1, that is, only when he believes

for sure that he is at the first exit. This leads to an interesting dynamic inconsistency

in that the driver would plan one thing in advance and then rationally change his mind

once he finds himself at an intersection.

4. This follows because Poo + Pol' = together with Poo + Pof + Pro + PIf 1 implies that

Pfo + Pfl and, at the same time, Poo + Pfo = together with }Joo + Pol' + Pfo + PfI = I

implies that Pol .+. Pff Therefore two of the five equations are redundant.

Strategies(lJHI N:1SIl <I> 143

()

4

FIGURE 7.10 Theabsent-mindeddriver.

o F

()

F

2 o o 2 o o I

o o 2 o 2

Sequential Sil11tlltaneOll.'>

FIGURE 7.11 TheBattleoftheSexesgame: two ven-dons.

7.2.3 Normal-Form Representation of Extensive-Form Games

Considerthe two variantsoftheBattleoftheSexes game presented in Figure 7.II.

Thesimultaneous-moveversion in therightpanel is onethatwehaveseenbeforein

its matrixform, asfollows:

Player2

o F

o 2, 1 0,0

Player I

F 0,0 1,2 I

Now considerthe sequential-moveBattleofthe Sexes game depicted in the left

panel. Recall that S] = {O, F} and S2 too, of, f0, fn,where f0, for example,

meansthatplayer2playsf afterplayer1plays 0,whileplayer2playsafterplayer

1plays F.Thisgamecanberepresentedbya2 x 4 matrixas follows:

Player2

00 of .fa .ff

o

Player1

F

As this matrixdemonstrates,eachofthefourpayoffsintheoriginalextensive-form

gameisreplicatedtwice.Thishappensbecauseforanypurestrategyofplayer I, two