LECTURE – 2

Sets and Russell’s Paradox

Sets are collections of unique elements. Russell's paradox questions set theory's consistency by
asking about sets that don't contain themselves, challenging set definitions.

Consider a set of all sets that do not contain themselves. If it contains itself, then it shouldn't,
leading to contradiction. Conversely, if it doesn't contain itself, then it should, again creating a
contradiction.

Consider the set R that contains all sets S such that S is not an element of itself:

R={S|S∉S}

This set R leads to Russell's paradox when questioning whether R contains itself or not. This
paradox challenges the foundation of set theory.

Russell's paradox highlighted flaws in unrestricted set formation, driving the creation of Zermelo-
Fraenkel set theory (ZF). ZF's axioms restrict set construction, preventing paradoxes, establishing a
rigorous foundation essential for coherent mathematics worldwide.

The Cartesian product 𝐴 × 𝐵 comprises ordered pairs where the first element is from set A and the
second from set B.

𝐴 × 𝐵 = { (a,b) ∣ a∈A, b∈B }

For sets with m and n elements, the size of the Cartesian product A × B is m × n.

The power set of set A is P(A) or2 𝐴 , comprising all subsets, including the empty set and A itself.

Mathematical expression for the power set:

P(A) = {X | X ⊆ A}
Relations and Functions

A relation R from set A to set B is a subset of A × B, indicating a connection between their ordered
pairs. A function is a relation where each element in A has a unique image in B.

Every relation/function has a Domain, Co-Domain, and Range:

• Domain (A) is the set of input values.

• Co-Domain (B) is the set of potential output values.
• Range is the actual set of output values produced for specific inputs, a subset of the co-
domain.

Example: In the Head-Tail Game, two players toss coins. If results match, B pays A 1 rupee; if
different, A pays B. Represented as a matrix:

Player B

Heads Tails

Player A Heads (1,-1) (-1,1)

Tails (-1,1) (1,-1)

Cartesian Product: {H,T} x {H,T} = {HH, HT, TH, TT}

Player A's: UA = {(H,H), (T,T)} → (1, -1) ⊂ R

Player B's: UB = {(H,H), (T,T)} → (1, -1) ⊂ R

Essentials of Normal Form Games: Agents, Actions, and Payoffs

1. Agent Set : Agents involved in the game.

2. Action Set : Potential strategies or actions for each agent.
3. Payoff Set / Utilization Function : The payoff/utilization functions, determining outcomes or
benefits derived from the game's choices and interactions.
Thus, combining as a triplet:

A normal form game = (N, {Ai}i⊂N , {Ui}i⊂N )

Where N is the set of numbers from 1 to N (number of players); {Ai} is the action set
A1,A2,.....An. And Finally, {Ui} is the Payoff/ Utilization function Note in reference to i : i ⊂ N

Ui = π{i⊂N}Ai → R

Prisoner Dilemma’s Working

A/B Confesses Does not Confess

Confesses (5,5) (0,10)
Does not Confess (10,0) (1,1)

In the Prisoner's Dilemma, two players choose to confess or not. Payoffs vary based on their
choices.

A = {C, D} and B = {C, D} are the Action Functions.

A and B are the Players - 2 in number.

C= Confess, D = Does not confess.

UA : A × B → R

UB : A × B → R

Dominant Strategy Insights

A dominant strategy ensures the best payoff regardless of others' choices. In the Prisoner's
Dilemma, both confessing is dominant (5,5).

For Person A

UA(C, C) > UA(D, C) UA(C, D) > UA(D, D)

And Similarly for Person B

UB(C, C) > UB(D, C) UB(C, D) > UB(D, D)

The general equation for a dominant strategy in a game is when a player's strategy yields a higher
payoff regardless of the opponent's choice.

General equation:

𝑈𝑖 (ai , a−i))≥ 𝑈𝑖 (𝑎′𝑖 , a−i)