Game theory - University of Alberta

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Rawls’ theory of justice
Central idea:
All social primary goods – liberty and opportunity, income and wealth, and the bases of
self-respect – are to be distributed equally unless an unequal distribution of any of these
goods is to the advantage of the least favoured.
In this ‘general conception’ Rawls ties the idea of justice to an equal share of social
goods, but he adds an important twist:
We treat people equals by removing not all inequalities, but only those which
disadvantage someone. If certain inequalities benefit everyone, by drawing out socially
useful talents and energies, then they will be acceptable to everyone.
Read more from the site (especially the section on The Veil of Ignorance and after):
http://infotech.fanshawec.on.ca/faculty/jedicke/rawls.htm
Game theory
Games in matrix form
Player 2
Player
1
s12S2
s22S2
s11S1
u1(s11,s12), u2(s11,s12)
u1(s11,s22), u2(s11,s22)
s21S1
u1(s21,s12), u2(s21,s12)
u1(s21,s22), u2(s21,s22)
A two-player matrix game has the following components:
 Two players 1 and 2
 A set of strategies S1 for player 1 and S2 for player 2.
 A utility function u1 for player 1 and u2 for player 2. The
utility function represents the preferences of the player over
pair of strategies.
We assume that each player chooses one strategy from his set
independently of the other player.
The outcome of the game is determined by the pair of chosen
strategies.
Sometimes we refer to the players as ‘raw’ vs ‘column’, and we
refer to the strategies as ‘top, middle, bottom’ vs ‘left, centre,
right’
Row player
Top
Middle
Bottom
Game matrices – general forms
Pure coordination game
Left
2,2
1,0
1,0
Column player
Center
4,1
3,3
3,2
Right
4,0
7,2
1,4
Raw player
Top
Bottom
Column player
Left
Right
1,1
0,0
0,0
1,1
Example
Carl
Cecille
HUB
SUB
HUB
1,1
0,0
SUB
0,0
1,1
Exercise:
David and Cressida want to each buy a new computer. It will be either a Mac or a PC.
Neither of them particularly cares about which brand it is, but they do want to end up
with the same kind because they do a lot of work together.
Model this situation as a game of pure coordination.
Asymmetric coordination game
Raw player
Top
Bottom
Column player
Left
Right
2,2
0,0
0,0
1,1
Exercise
Imagine a society choosing to adopt the metric or the imperial system of measurement.
Assume that the best outcome is if everybody adopts metric, the second best if everybody
uses imperial, and the worst two outcomes are those without a universal standard. Model
this situation as a matrix game (with the simplifying assumption that there are two groups
in society making the decision).
Battle of the sexes
Raw player
Top
Bottom
Column player
Left
Right
1,2
0,0
0,0
2,1
Example
♀
♂
Flower
show
Truck rally
Flower
show
Truck rally
1,2
0,0
0,0
2,1
Chicken
Raw player
Top
Bottom
Column player
Left
Right
0,0
3,1
1,3
2,2
Straight
Turn
Driver 2
Straight
Turn
0,0
3,1
1,3
2,2
Example
Driver 1
Prisoner’s dilemma
Raw player
Top
Bottom
Column player
Left
Right
1,1
0,3
3,0
2,2
Example:
Israel
Arab countries
Build-up
Reduction
Build-up
2,2
4,1
Reduction
1,4
3,3
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