1. Game Theory Game 2 Dominant Strategies

2. The Game Mike Shor 2 The Economist SG Time S 0, 50100, 80 G 60, 0 60, 100

3. The Game Mike Shor 3 The Economist SG Time S 0, 50100, 80 G 60, 0 60, 100 G is “safe” for Time S is better for Time if the Economist is likely to pick G

4. The Economist Mike Shor 4 The Economist SG Time S 0, 50100, 80 G 60, 0 60, 100 In the role of The Economist:  88% selected G

5. Time Mike Shor 5 The Economist SG Time S 0, 50100, 80 G 60, 0 60, 100 In the role of Time:  Only 28% selected S

6. Rationality & Common Knowledge Mike Shor 6 The Economist SG Time S 0, 50100, 80 G 60, 0 60, 100 Rationality: If you have a dominant strategy, play it Doesn’t matter what opponent might do!

7. Rationality & Common Knowledge Mike Shor 7 The Economist SG Time S 0, 50100, 80 G 60, 0 60, 100 Common Knowledge: Others will use their dominant strategy  88% did!  But …

8. Rationality & Common Knowledge Mike Shor 8 Common Knowledge: Others will use their dominant strategy  (usually)  Ryan earned 0 The Economist SG Time S 0, 50100, 80 G 60, 0 60, 100

9. Rationality & Common Knowledge Mike Shor 9 Common Knowledge: Others will use their dominant strategy  (usually)  Tim earned 0 The Economist SG Time S 0, 50100, 80 G 60, 0 60, 100

10. Why Play a Dominated Strategy? Mike Shor 10 “I am in competition” “I am taking someone down with me” “I lose 30, but they lose 100” “Huh? I was confused” SG S 0, 50100, 80 G 60, 0 60, 100

11. Historical Data Mike Shor 11 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

12. Future Data Mike Shor 12