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June 19, 2021 73347 Game TheoryLecture 22 1 Static (or SimultaneousMove) Games of Inplete Information Introduction to Static Bayesian Games June 19, 2021 73347 Game TheoryLecture 22 2 Outline of Static Games of Inplete Information ? Introduction to static games of inplete information ? Normalform (or strategicform) representation of static Bayesian games ? Bayesian Nash equilibrium ? Auction June 19, 2021 73347 Game TheoryLecture 22 3 Today’s Agenda ? What is a static game of inplete information? ? Prisoners’ dilemma of inplete information ? Cournot duopoly model of inplete information June 19, 2021 73347 Game TheoryLecture 22 4 Static (or simultaneousmove) games of plete information ? A set of players (at least two players) ? For each player, a set of strategies/actions ? Payoffs received by each player for the binations of the strategies, or for each player, preferences over the binations of the strategies ? All these are mon knowledge among all the players. June 19, 2021 73347 Game TheoryLecture 22 5 Static (or simultaneousmove) games of INCOMPLETE information ? Payoffs are no longer mon knowledge ? Inplete information means that ? At least one player is uncertain about some other player’s payoff function. ? Static games of inplete information are also called static Bayesian games June 19, 2021 73347 Game TheoryLecture 22 6 Prisoners’ dilemma of plete information ? Two suspects held in separate cells are charged with a major crime. However, there is not enough evidence. ? Both suspects are told the following policy: ? If neither confesses then both will be convicted of a minor offense and sentenced to one month in jail. ? If both confess then both will be sentenced to jail