1. Game Theory The strategy in daily life

2. Foundation The three winners for Nobel prize at economy field in 1994 John F. Nash Reinhard Selten John Harsanyi

3. What is Game Theory Game theory is a branch of mathematics A tactic thinking in daily life By tactic guessing, players can find out the best strategy and the largest pay- off for themselves

4. The three basic elements of games Two or more players, each player has two or more strategy to select The outcome depends on chosen strategies by players Players have different preferences toward the outcomes, which influence players’ strategies

5. The studies of the games Zero-sum game theory Non zero-sum game theory Prisoner's Dilemma Simultaneous-move game - Nash Equilibrium Dynamic game

6. Zero-sum game theory All sides can win or lose One person's victory simultaneously heralds the opponent's defeat Examples ： poker card

7. Prisoner’s Dilemma A and B are two arrested thieves The policeman tells A: 1.“If you conceal and the other confesses, you will be taken into custody for nine weeks.” 2.“If you conceal and the other conceals, both of you will be taken into custody for one week.” 3.“If you confess and the other confesses, both of you will be taken into custody for six weeks.” 4.“If you confess and the other conceals, you will be released.”

8. B concealsconfesses A conceals -1 ， -1-9 ， 0 confesses 0 ， -9-6 ， -6

9. To the sum benefit of A and B A conceals and B conceals: -2 weeks A conceals and B confesses: -9 weeks A confesses and B conceals: -9 weeks A confesses and B confesses: -12 weeks Both A and B concealment is the best policy

10. From A’s view A confesses: -6 ---better B confesses A conceals: -9 A confesses: 0 ---better B conceals A conceals: -1 Whether B confesses or conceals, A’s confession is the best policy.

11. Nash Equilibrium Selling ice shavings on the beach The picture is represented the beach 01/4 1/23/41

12. 成員 鄭為仁 B9205023 李炳翰 B9205016 張晏維 B9205017