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PRESENTED BY
J.PRAVEENA
Introduction
BASIC TERMINOLOGY.
No. of Players.
Payoff.
Strategy.
Value of the Game.
Payoff Matrix.
Two-Person Zero-sum Game.
Maximin & Minimax Principle.
Principle of Dominance
In general the following rules of dominance are used to
reduce the size of payoff matrix:
Rule 1:- If all the elements in a row of a payoff matrix are less
than or equal to the corresponding elements of the other row
then the player A will never choose the ith strategy or in
other words the ith strategy is dominated by the jth strategy.
Rule 2:- If all the elements in a column of a payoff matrix are
greater than or equal to the corresponding elements of the
other column then the player B will never choose the rth
strategy or in other words the rth strategy is dominated by
the sth strategy.
Cont.
Rule 3:- A pure strategy may be dominated ifnit is
inferior
to average of 2
or more other pure strategies.
Nash Equilibrium:It is a set of strategies such that each
player believes (correctly)that it is doing the best
it can, given the strategy of the opponents.
For Example:-
Cont
A mixed strategy game can be solved by
following three methods:
Algebraic Method
Graphical Method
Linear Programming Method
Limitations of Game
Theory
Cont.
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