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1) Players.
2) Rules that specify the strategies that each player can choose.
3) Pay -offs or the reward of the game.
There are many types of games, but the one that we will use to explain first, is the s
Which mean the pay-off matrix will be in the "normal form" which is as follows
Normal Form of Game
Stra
Strategy 1
Player A
Strategy 2 -
In the "normal form" of game, the horizontal cell in the table specify the strategy of
A
and the vertical cell specify the strategy of Player A.
The fist number in the pay-off specifies the pay-off for Player A and
the second number in the pay-off specifies the pay-off for Player B.
Eqilibrium of a game
Equilibrium of a game is a situation which determines the outcome of a games .
There are many type of equilibrium of a game, for example; Nash Equlibrium, Max
Nash Equilibrium
Nash Equilibrium is a set of strategies such that each player is doing the best it can
Maximim Equilibrium
Maximim Equilibrium is a set of strategies which each players maximize the minim