Social Interactions
Strategy: A complete plan of action for the game
Move/Action: the next action taken by a player at that point in time
Social Dilemma: The idea that people can make decisions about their consumption of a good or
service, and not consider how this decision impacts on others.
Free Rider: This person who gets the bene t without putting in the work.
Altruistic Preferences: Preferences that mean he/she cares for others and may be willing to
sacri ce their happiness for others.
Social Preferences: The player has an attitude where they don’t care for themselves
Strategic Interaction: One where people making a decision are aware that their choices have an
impact on someone else, and vice versa.
The components of a game:
1. The players- who is playing
2. The strategies- what complete plans of action are available to the players throughout the
course of the game
3. The information- what each player knows when they make their decision (could be a
sequential or simultaneous game)
4. The payo s- the utility the player gets from a particular combination of their own and the
other player’s action
Simultaneous game:
- one where the two players are moving with the same amount of information.
- NB: does not mean that the players have to move at the same time
- e.g. Rock, paper, scissors
Sequential move game:
- One where players update their information in between moves
- e.g. noughts and crosses or chess
One-shot game: only one shot at playing the game
Payo : A representation of the utility that an individual gets in a given situation
- can be ordinal: only the order of the payo matters, but not the size of them.
- can be cardinal: where the order and the size of the payo matters
Nash Equilibrium: The combination of strategies on a game such that neither player had an
incentive to change their strategy, given the strategy choice of their opponent.
NB: Must label the cells in a game table as (ROW PLAYER STRATEGY, COLUMN PLAYER
STRATEGY)
Nash Equilibrium = naming the cell with words
Nash Equilibrium outcome: the payo s you get from the cells (will be numbers NOT words)
Dominant Strategies:
- best response
- Strategy X is a strictly dominant strategy for player A if it provides a strictly greater payo than
all of Player A’s other strategies, no matter what player A’s opponent does.
Dominant Strategy Equilibrium = a Nash Equilibrium where players are both playing their
dominant strategy
fif ff ff ff fi ff ff
Strategy: A complete plan of action for the game
Move/Action: the next action taken by a player at that point in time
Social Dilemma: The idea that people can make decisions about their consumption of a good or
service, and not consider how this decision impacts on others.
Free Rider: This person who gets the bene t without putting in the work.
Altruistic Preferences: Preferences that mean he/she cares for others and may be willing to
sacri ce their happiness for others.
Social Preferences: The player has an attitude where they don’t care for themselves
Strategic Interaction: One where people making a decision are aware that their choices have an
impact on someone else, and vice versa.
The components of a game:
1. The players- who is playing
2. The strategies- what complete plans of action are available to the players throughout the
course of the game
3. The information- what each player knows when they make their decision (could be a
sequential or simultaneous game)
4. The payo s- the utility the player gets from a particular combination of their own and the
other player’s action
Simultaneous game:
- one where the two players are moving with the same amount of information.
- NB: does not mean that the players have to move at the same time
- e.g. Rock, paper, scissors
Sequential move game:
- One where players update their information in between moves
- e.g. noughts and crosses or chess
One-shot game: only one shot at playing the game
Payo : A representation of the utility that an individual gets in a given situation
- can be ordinal: only the order of the payo matters, but not the size of them.
- can be cardinal: where the order and the size of the payo matters
Nash Equilibrium: The combination of strategies on a game such that neither player had an
incentive to change their strategy, given the strategy choice of their opponent.
NB: Must label the cells in a game table as (ROW PLAYER STRATEGY, COLUMN PLAYER
STRATEGY)
Nash Equilibrium = naming the cell with words
Nash Equilibrium outcome: the payo s you get from the cells (will be numbers NOT words)
Dominant Strategies:
- best response
- Strategy X is a strictly dominant strategy for player A if it provides a strictly greater payo than
all of Player A’s other strategies, no matter what player A’s opponent does.
Dominant Strategy Equilibrium = a Nash Equilibrium where players are both playing their
dominant strategy
fif ff ff ff fi ff ff
