Sequential Games Summary

Game Theory · Axiom Academy

SUMMARY Sequential Games Summary Let's review the key concepts from Unit 3 on Sequential Games. Sequential vs Simultaneous Games Sequential Games: Players move in a specific order with knowledge of previous moves, leading to dynamic strategic decisions Simultaneous Games: Players choose actions at the same time without observing opponents' choices Key Difference: Sequential games involve information revelation over time, while simultaneous games involve uncertainty about opponents' choices Representation: Sequential games use game trees (extensive form); simultaneous games use payoff matrices (normal form) Game Tree: Visual representation showing decision nodes, branches for actions, and terminal nodes with payoffs Decision Nodes: Points where a player chooses an action, labeled by the player who moves Branches: Represent available actions at each decision node Terminal Nodes: End points showing final payoffs for all players Information Sets: Groups of nodes that are indistinguishable to a player (relevant for imperfect information games) Example Recap: Backward Induction Method Step 1 - Start at Terminal Nodes: Begin at the end of the game tree and identify the final payoffs for each possible outcome Step 2 - Work Backward to Last Decision: Identify the last player to move and determine their optimal action at each decision node (choosing the action that maximizes their payoff)

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