Tuesday, January 11, 2011
Game Theory - Final Exam Game
The game payoff should be converted into utility so as to be an economic game. I would wager that if I changed the C to an F everyone would opt to take the test.
This image is from my coloring workbook on microeconomics. I have dubbed the knight, Sir Nash. Sir Nash behaves strategically when making decisions in that he considers the actions of his rivals. In the grading game above, both players had to choose whether to take the test or not to take the test at the same time. There are many games, like checkers, in which one must go first. I also think that firms that are price takers do not act strategically and firms that are monopolies also do not consider the actions of rivals.
Game theory is a fascinating and complex decision-making tool. I hope to use this blog to continue my reflection about the topic. Right now, we have four inches of snow on the ground, and I have to decide whether to shovel my sidewalk or wait and hope my neighbor shovels it for me. What would happen if we both wait?