Incomplete Information

Game Theory · Axiom Academy

What happens when players don't know everything about the game? Imagine you're negotiating a salary with an employer. You don't know their maximum budget. How does this uncertainty change your strategy? Click on a scenario to explore how uncertainty affects decision-making: Types: The Hidden Characteristics In game theory, a player's "type" represents their private information - things only they know about themselves. Explore how types create strategic uncertainty: The seller knows if the car is high-quality or low-quality. The buyer doesn't! True value: 15,000 | Seller's minimum price: 13,000 True value: 8,000 | Seller's minimum price: 6,000 You're the buyer. What's your maximum offer without knowing the car's quality? Making Decisions Under Uncertainty Now you're bidding in an auction where you don't know how much your opponent values the item. Your strategy must account for this uncertainty. Your situation: You value an antique at 500. Your opponent's valuation is either 300 (60% chance) or 700 (40% chance). Safe but might lose to high-type opponent Wins more often but lower profit margin Based on expected opponent type Incomplete information games are everywhere in the real world. Explore how this concept applies across different domains: Now that you've explored incomplete information intuitively, here's what you'll learn to formalize these insights:

This is the written version of the interactive lesson above. See the full Game Theory course.