How can Game-theory be used to both analyze and predict the outcome of current US-China Trade war?
Definitions: search and use those
1) Prisoner’s Dilemma:
- Dominated Strategy
- Nash Equilibrium
2) Dynamic Game: - Strategy profile
- Backward Induction
- Subgame Perfection (subgame perfect Nash equilibrium)
- Decision nodes (branches where action is taken at)
- Terminal nodes (payoffs)
3) Multi-stage game with discounting: - Discount rate
- Deviation (whether on stage or infinite)
- Grimm trigger strategy
- Nash Folk theorem
- Minimax payoff
4) Bayesian game with incomplete information - Type of player uncertainty
- Nature (for chance moves, the appropriate probabilities)
- Type of player (for each position, the different types that occupy it)
- Beliefs (what each type believes about the other types)
- Belief profile: a probability distribution over each node in each information set
- Strategy profile: a mapping from information sets to actions for everyone
- Bayesian Nash Equilibrium
- Information set
Sample Solution
