Some Useful Definitions for Game Theory


Economics The study of choice in an environment of scarcity

Game A conflict situation where one must make a choice knowing that others are making choices too. The outcome of this conflict is determined in some prescribed way by the sum of these choices.

Positive Sum Game A game where both players can come out ahead

Negative Sum Game A game where both players can lose

Zero Sum Game A game where one player’s gain is exactly equal to the other’s loss

Rationale Choices that maximize one’s personal utility… define it as you will. Players are assumed to be perfectly logical and interested only in winning.

Irrationale Choices that are motivated by reasons other than utility.

Utility Someone’s perceived benefit from a transaction

Saddle Points Where the maximin intersects with the minimax… neither player can expect to do better by changing strategy. They may not be happy, but they are satisfied. This is the expected play outcome if everyone is behaving rationally.

Golden Rule Do unto others as you would have them do unto you.

Free Riding Trying to better one’s interests in a way that would be disastrous if every other player did this (hopping turnstiles, making bots to produce magic swords)

Mamihlapinatapi Looking at each other, hoping that either will offer to do something that both parties desire but are unwilling to do.