Game Theory and Strategic Behavior
Exam 3 Part II
28/04/2013

Exam 3 Part II Game Theory and Strategic Behavior

The main point of the paper is the paradox between theoretically predicted equilibrium and Nash equilibrium. Results of the research state that people often act differently and there is no model of behavior. Most of actions are spontaneous and it is provoke by kind of emotion conditions such as calmness or fearless which sometimes interferes to take the correct decisions.
By supporting his ideas the author of the article, introduce ten examples driven by experiments. While I am reading the article, I understand that it covers the whole material that we study in class during the whole semester – for example, it introduces some of the main point of game theory – dynamic games, several exists of games or prediction how the game will end. As we know from the course that most of games are consisted by two payers which shows us at least two treatments. In each game, we have coincided point that is called Nash equilibrium. Without reaching the point of equilibrium, we go to the second treatment where the payoff changes and there is changing in the strategy of player 1.
In fact, the article shows us a famous and significant game that also called one-shot traveler’s dilemma game. The main idea of the model is that the payoffs change constantly and there is not affected on the Nash equilibrium. By each round, the strategy and behavior of people are shifting from the lower limit to the upper limit.
Another game is represented in the article that is called pennies game. In the model there are three treatments – one with symmetrical information that plays role as Nash equilibrium. Pennies game is described as asymmetric matrix (2x2) or (3x3) (Row x Column) depending