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Game Theory: Click To Edit Master Subtitle Style
Game Theory: Click To Edit Master Subtitle Style
Game Theory
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Environments
Decision under certainty, e.g., Product mix problems Decision under risk, e.g., Decision tree Decision under uncertainty, e.g., game theory
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(more optimistic condition) (minimum and maximum loss) (less conservative have a regret matrix)
Game theory
Based
on Mini Max Each player has finite or infinite number of choices called strategy The outcome or payoff of a game is summarized as function of strategies for each player
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Assumptions
Finite
no. of players Choices are made simultaneously, i.e., opponents choice is not known List of possible course of action is available to each player Every combination of course of action is associated with an outcome
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Bidding problem
Two items: 1 Rs. 75 II Rs. 125 100/- chest is War usually known 130/-
Two bidders: A B
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Example
A has two ammunition stores, one of which is twice as valuable as the other. B is an attacker who can destroy an under undefended store but he can only attack one of them A known that B is about to attack but does not know which A can successful defend only one store at a time.
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Attack
-2
Defend smaller store
-1
0
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Thanks
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