Extensive Form Games

Prof. John Patty

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Game Trees

A game tree, T , has two basic components:

● a set of nodes, N , and

● a precedence relation, P ⊂ N 2,

For any pair of nodes η, η ′, (η, η ′) ∈ P means that the node η comes imme-
diately before η ′ in the tree, which we denote by η ≺ η ′.

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Game Trees
A five player example: N = {1, 2, 3, 4, 5}

Nonterminal (”decision”) node 1

Terminal (”payoff”) node
Player who “owns” decision node

2 3 2
Action Label
x y
4 4 4 4 3

5 5
4

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Information sets

Information sets describe what players know when they make choices.

When two nodes are in the same information set, the player does not ob-
serve which node he or she is “at.”

Player i ∈ N ’s information sets: Hi, a partition of nodes controlled by i.

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Imperfect versus Perfect Information

Perfect Information:
All players observe all earlier moves when making their choices
No Simultaneous Moves
Examples: Chess, Checkers, . . .

Imperfect Information:
Everything else.
Examples: Static Games of Complete Information

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Complete versus Incomplete Information

Complete Information:
All payoffs completely determined by any pure strategy profile, s ∈ S
No payoff-relevant unknown exogenous information
Examples: Chess, Rock-Paper-Scissors

Incomplete Information:
Uncertainty about ≥ 1 player’s payoff for one or more pure strategy profile
Examples: “Games of chance,” life in general.
We will cover these in the second half of the course

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Imperfect Information versus Incomplete Information

Both represent some uncertainty on the part of players

Uncertainty about the ultimate impact of their choices

Imperfect information: endogenous uncertainty

Mixed Strategies

Incomplete information: exogenous uncertainty

An (at least partially) unknown “state of nature”
Weeks 3 and 4 of the course.

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Game Trees with Non-Singleton Information Sets

1 Information Set
a d
b c
n2
2 3
n1
x z
y
4 n4 4 3
n3 n5 n6

5 5
n7 n8
4
n9

H2 = {{n1, n2}}
H4 = {{n3, n4, n5}, {n6}, {n9}}
H5 = {{n7}, {n8}}
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Non-Singleton Information Sets: “Simultaneous Moves” Example

L R
U 2, 5 3, 4
D 1, 2 5, 3
A 2x2 Simultaneous Move Game in Normal Form

U D

L R L R

2,5 3,4 1,2 5,3

A 2x2 Simultaneous Move Game in Extensive Form

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Perfect versus Imperfect Recall

Games of perfect recall:

“All players remember everything they’ve learned during the game”

Games of imperfect recall are weird & fun.

Here are a few examples:

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Perfect versus Imperfect Recall:
Forgetting Your Earlier Choice

w x

1
y z y z

1 0 0 1

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Perfect versus Imperfect Recall:
Remembering Your Earlier Choice but Forgetting Something Else

2 b=1 b=1 0
1 a=L 1 a=R 1

0 b=0 θ1=1 (p) b=0 3

2 b=1 θ1=0 (1-p) b=1 0

a=L 1 a=R
0 b=0 b=0 3

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Perfect versus Imperfect Recall:
Forgetting Both Your Choice and Something Else

Nature
(Pr[θ1=0]=0.6) θ1=H θ1=T (Pr[θ1=T]=0.4)

1 1
x e e x

2 1 2
h t h t

4 0 0 4

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Strategies in Extensive Form Games

A pure strategy is a complete plan of play:

si ∶ Hi → Ai with si(hi) ∈ Ai(hi) for all hi ∈ Hi.

Set of all pure strategies for player i: Si.

Mixed strategies: probability distribution over Si.

Set of all mixed strategies for player i: Σi ≡ ∆(Si).

This is often a set of high dimensionality.

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Strategies in Extensive Form Games: An Example

1
n1
A B
2 n2 n3 2

C D C D

1 n4 n5 1 1 n6 n7 1

W X W X W X W X

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Strategies in Extensive Form Games: An Example, Continued

A pure strategy for Player 2 maps the set {n2, n3} into {C, D}.
For example,
s2 = (D, C)
represents the strategy “choose D at n2 and choose C at n3”

A pure strategy for Player 1 maps the set {n1, n4, n5, n6, n7} into either
{A, B} or {W, X} as appropriate.

Thus, an example would be

s1 = (B , X , W , W , X ).
® ® ¯ ¯ ®
n1 n4 n5 n6 n7

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Strategies in Extensive Form Games: An Example, Continued

So. . .the pure strategy spaces are:

S2 = {(C, C), (C, D), (D, C), (D, D)}, but

S1 = {(A, W, W, W, W ), (A, W, W, W, X), . . . , (B, X, X, X, X)},
= {A, B} × {W, X}4

Note that ∣S1∣ = 25 = 32.

Thus, Σ1 is the 31-dimensional simplex!

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Behavior Strategies

In many extensive form games, Σ = ⨉i∈N Σi is “bigger” than necessary.

In many games, behavior strategies are all we need.

A behavior strategy maps each of the player’s information sets into the set
of lotteries over the available actions at that information set.

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Behavior Strategies

Specifically, a behavior strategy is a function, σi ∶ Hi → ∆Ai(hi), where

σi(ai∣(hi)) = Pr[i chooses ai∣hi].

Note that the set of behavior strategies for Player 1 in our example is [0, 1]5
Of course, this is “only” a 5-dimensional space, as opposed to 31. Luckily,
we have this:

Kuhn’s theorem:
Mixed and behavioral strategies are equivalent in games of perfect recall.

This is one of several reasons why we do not typically use games of im-
perfect recall if we can help it.
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Normal Form Representation of Extensive Form Games

● Every extensive form game has a unique normal form representation

● The converse is not true: normal form games identify the “strategic
nature” of the game (but they’re hard to work with)

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Normal Form of Extensive Form Game: Example

Player 1

A B

Player 2 Player 2

L R L R

3,5 2,4 0,0 5,3

Normal Form Representation

(L,L) (L,R) (R,L) (R,R)

A (3,5) (3,5) (2,4) (2,4)
B (0,0) (5,3) (0,0) (5,3)
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Normal Form of Extensive Form Game: Example

Player 1
X Y
Player 1

A B A B

Player 2 Player 2 Player 2 Player 2

L R L R L R L R

3,5 2,4 0,0 5,3 3,5 2,4 0,0 5,3

This game is strategically equivalent to the previous one.

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Normal Form Representation

(L,L) (L,R) (R,L) (R,R)

(X,A,A) (3,5) (3,5) (2,4) (2,4)
(X,B,A) (0,0) (5,3) (0,0) (5,3)
(X,A,B) (3,5) (3,5) (2,4) (2,4)
(X,B,B) (0,0) (5,3) (0,0) (5,3)
(Y,A,A) (3,5) (3,5) (2,4) (2,4)
(Y,B,A) (3,5) (3,5) (2,4) (2,4)
(Y,A,B) (0,0) (5,3) (0,0) (5,3)
(Y,B,B) (0,0) (5,3) (0,0) (5,3)

But it does have many more (equivalent) Nash equilibria. . .

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Nash Equilibrium in Extensive Form Games

For extensive form game Γ , let N F (Γ ) be its normal form representation.

σ ∗ is NE of Γ ⇔ σ ∗ is NE of N F (Γ ).

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Normal Form of Extensive Form Game: Example

Player 1

A B

Player 2 Player 2

L R L R

3,5 2,4 0,0 5,3

3 Pure Strategy Nash Equilibria:

(L,L) (L,R) (R,L) (R,R)

A (3,5) (3,5) (2,4) (2,4)
B (0,0) (5,3) (0,0) (5,3)

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Normal Form of Extensive Form Game: Example

Here are the 3 pure strategy Nash equilibria, pictured:

Player 1 Player 1 Player 1

A B A B A B

Player 2 Player 2 Player 2 Player 2 Player 2 Player 2

L R L R L R L R L R L R

3,5 2,4 0,0 5,3 3,5 2,4 0,0 5,3 3,5 2,4 0,0 5,3

Two of these equilibria are less “rational” than the third:

(A, (L, L)) and (B, (R, R)).

We’ll talk about this (a lot) more tomorrow.

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