GAME THEORY

Problem 12:

Blue Army
Attack Defend
Attack 30 50
Red Army
defend 40 0

Quick Techniques for Exams:

1) To find gain strategy : first find the MIN and then MAX of MINs.
2) To find Loss strategy : First find MAX, then MIN of MAXs

Qus: 1) Optimal Strategy = Secure Strategy (for Red Army to gain at least something)

(Thinking Process) Assume I am the Red Army. I will try my best to gain at least
something. In this case, I have two options now, either attack or defend. According to
the payoff of the first row, if I attack, I will get either 30 or 50 no matter what Blue Army
does. However, If I defend, I will get either 40 or 0 no matter what Blue Army does.
Do I want get 0? If I defend, there is a risk that I will get 0. But, if choose to
Attack, I will at least get the payoff 30. That’s why, the optimal strategy is to Attack. By
attacking, I am securing at least 30.

Qus: 2) Optimal Strategy = Secure Strategy (for Blue Army to Loss the minimum)

Why am I thinking of the loss of the Blue Army? Why not gain?

Ans is “The payoff table, in terms of the value of property gained or lost for the Red
Army, is shown here. Any gains for the Red Army are losses for the Blue Army. (This is
also used in negotiations and bargaining.)”

Ans: If Blue Army attack, they can lose either 30 or 40. In this case, the highest they can
lose 40. But if they choose to defend, there is possibility to lose maximum of 50. So for
them, choosing to attack is the optimal strategy. By attacking, they are trying to
minimize their risk of losing 50 to 40.