Table of Contents
Competitive Strategy
Take care of your competitors
Simultaneous Games
Sequential Games
Competitive Strategy
Source:
https://www.coursera.org/learn/competitivestrategy/outline?module=WeFmF
From
Université Louis-et-Maximilien de Munich (LMU)
, by
Tobias Kretschmer
Take care of your competitors
Simultaneous Games
A strategy is a player's plan of actions in a “game”.
Important parts of a game are:
players, actions, payoffs, and rules
.
You can usually rely on the other players having a
dominant strategy
.
Dominated strategy
: a strategy that never does better that a given other strategy (eg. the dominant one).
When we have a game matrix then the idea is to eliminate the dominated strategies.
Nash equilibrium
= a combination of strategies such as no player can deviate unilaterally from his current strategy to improve his payoffs.
We can have a
Nash Equilibrium
without every player having a dominant strategy.
Prisoner's Dilemma : when nash equilibrium is not the best option the players could get if they were working together.
Sequential Games
Sequential games == Dynamic games (eg. games with a time aspect).
We draw
game trees
in that case.
First decision start the game
Then for each decision, the other player can take its own decision.
backward induction
: simplification of sequential game.
eliminating options that do not maximize profit.