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how people behave in strategic situations. how individuals make decisions when they are aware that their actions affect each other and when each individual takes this into account.
TYPES OF GAMES
Zero-Sum or Non-Zero-Sum
Cooperative or NonCooperative
Two-Person or N-Person
These games involve only two adversaries or players (who may be armies, teams, firms, and so on). Zero sum : one player wins whatever the other one loses, so that the sum of their net winnings is zero. In general, a two-person game is characterized by 1. The strategies of player 1 2. The strategies of player 2 3. The payoff table
Each player simultaneously showing either one finger or two fingers. If the number of fingers matches, so that the total number for both players is even, then the player taking evens (say, player 1) wins the bet.
Impartial arbitrator to set the wage increase somewhere between $1.10 and $1.60 per hour (inclusively). Arbitrator normally accepts the proposal of the a. side that gives the most from its final figure. b. if both give in the same amount, then the halfway between ($1.35 in this case).
1
MANAGEME NT 2
$1.35
$1.60
(G)
(L)
$1.60
$1.35
(L)
(G)
Clydes Decision
Remain silent
From their standpoint, it is not a good outcome. By remaining silent they would have spent one year in jail.
By pursuing their self-interest, they reach an outcome that is worse for each other. Cooperation is difficult to maintain, because cooperation is not in the best interest of the individual player.
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