Game Theory

1
Game Theory

• Game 1
• The P-beauty Contest
• http//www.gametheory.net/lectures/field.pl

2
P-Beauty Contests
3
Levels of Rationality
4
Class Strategies
5
Levels of Rationality
2
Penn (Wharton) Students Cal-Techs Board of
Trustees US High School Students
6
Levels of Rationality
2
3
Vanderbilt (Owen)
Penn (Wharton) Students Cal-Techs Board of
Trustees US High School Students
7
Levels of Rationality
2
3
Vanderbilt (Owen) Cal-Tech Undergrads
Penn (Wharton) Students Cal-Techs Board of
Trustees US High School Students
8
Results

• Average Number 32.157
• ¾ of Average 24.117

9
Results (Two Sections)

• Section 1 32.157
• Section 2 32.111

10
Closest

• Kris Mathis (25)
• Dave Alexander (25)
• Top ten if between 21 and 30

11
Furthest

• One person picked 100
• Maren Scoggins 75

12
Im Rational (But Surrounded by Morons)

• David Collins picked 0
• John Ford picked 0
• Fran Mikulicic picked 0.84

13
Not Just Making Fun

• Benchmarks
• Game Theorist
• Strategy 0 Distance 24.1
• Wife of a Game Theorist
• Strategy 25 Distance 0.9

14
Summary

• Common knowledge is bunk!
• Bounded rationality is not bunk!
• Must understand how far
  the reasoning of other players will go
• People generally think two to three steps ahead
  (The rule of three)
• Need to stay one step ahead
• Dont be too clever

15

• CCNY EE59866 8/30/05

• Results (49 students)
• Average Number 40.15
• ¾ of Average 30.11

16

• Winners

• S. Robley 31 5 pt
• I. Andino 30 4 pt
• W. Camargo 29 2.5 pt
• N. Nabil 29 2.5 pt
• M. Kabir 32 0.5 pt
• A. Cano 32 0.5 pt