Game Theory

Game 2

Dominant Strategies

The Game

Mike Shor2

The Economist

S G

TimeS 0 , 50 100 , 80

G 60 , 0 60 , 100

The Game

Mike Shor3

The Economist

S G

TimeS 0 , 50 100 , 80

G 60 , 0 60 , 100

G is “safe” for Time S is better for Time if the Economist is

likely to pick G

The Economist

Mike Shor4

The Economist

S G

TimeS 0 , 50 100 , 80

G 60 , 0 60 , 100

In the role of The Economist: 88% selected G

Time

Mike Shor5

The Economist

S G

TimeS 0 , 50 100 , 80

G 60 , 0 60 , 100

In the role of Time: Only 28% selected S

Rationality & Common Knowledge

Mike Shor6

The Economist

S G

TimeS 0 , 50 100 , 80

G 60 , 0 60 , 100

Rationality: If you have a dominant strategy, play it Doesn’t matter what opponent might do!

Rationality & Common Knowledge

Mike Shor7

The Economist

S G

TimeS 0 , 50 100 , 80

G 60 , 0 60 , 100

Common Knowledge: Others will use their dominant strategy

88% did! But …

Rationality & Common Knowledge

Mike Shor8

Common Knowledge: Others will use their dominant strategy

(usually) Ryan earned 0

The Economist

S G

TimeS 0 , 50 100 , 80

G 60 , 0 60 , 100

Rationality & Common Knowledge

Mike Shor9

Common Knowledge: Others will use their dominant strategy

(usually) Tim earned 0

The Economist

S G

TimeS 0 , 50 100 , 80

G 60 , 0 60 , 100

Why Play a Dominated Strategy?

Mike Shor10

“I am in competition” “I am taking someone down with me” “I lose 30, but they lose 100” “Huh? I was confused”

S G

S 0 , 50 100 , 80

G 60 , 0 60 , 100

Historical Data

Mike Shor11

Rationality (Economist editors) Vanderbilt: 90% pick Grenada Rutgers: 92% pick Grenada UConn: 90% pick Grenada

Common Knowledge (Time editors) Vanderbilt: 56% pick Scandal Rutgers: 56% pick Scandal UConn: 48% pick Scandal

Future Data

Mike Shor12