Term 3 : Chapter 6 : Game Theory

Notes
1. Two-person zero-sum game: 1 gain - 1
loss
2. Pure-strategy game:

Row player : min

Column player: max

max

min

3. Mixed-strategy game:
o Use probability distribution
4. Pay-off matrix : gain for the row resulting
from mix strategy.
5. Dominated strategy:
1. A two-person zero-sum game is defined
by the follow pay-off matrix.
Player
B
1
0

A
B
2
7

B
3
Play
A
1
er
1
2
A
A
8
1
1
2
1
0
Determine the optimal strategy for each
player and the value of the game. [3
marks]
2. A two- person zero- sum game is defined
by the pay-off matrix. Explain that the
game is stable. Is it a fair game?
[5]

1 3 2
3
5 4
2 2 5

3. In a presidential campaign, there are two

candidates, a Democrat (D) and a
Republican (R), and two types of issues,
domestic issues and foreign issues. The
units assigned to each candidates
strategy are given in the table where it
shows the strength of the Democrat
candidate concerning the issues in
relation to the Republican candidate.
Republican
Domest Foreign

ic
Democr
at

Domest
ic
Foreign

a) What is the
candidate?

best

-2

-1

strategy

for

each

[4 marks]
b) What is the value of this presidential
election? Give your comment. [3 marks]
c)
4. The table below shows a pay-off matrix
for player A in a zero-sum game.
Player B
II
III
-45
15
30
-30
15
-30

I
I
15
Play
II
-15
II
30
er A
I
Determine the optimal mixed-strategy for
each player. Then find the expected value
of the game.
5. Evon and Farah play a zer0-sum game.
The pay-off matrix of Evon is shown
below.
Farah
F1
F2
F3
E1
-1
2
-2
Evo
E2
3
3
0
E3
4
-2
1
n
a) Find the play safe strategy for Evon and
Farah. Explain if the game has a saddle
point. [4]
b) Why F1 should not be Farahs strategy?
[2]
c) Use a graphical method to determine the
optimal mixed- strategy of Evon and
Farah. Explain
d) why the mixed-strategy is better than the
pure strategy for both Evon and Farah. [9]
6. A two-person zero-sum game for players
A and B is represented by the pay-off
matrix

Term 3 : Chapter 6 : Game Theory

1 2 3
3
5 6
1
2 4

a. Show that the game has a stable solution.

[3]
b. State
the
value
of
the
game.
[1]
c. Determine the optimal strategy for each
player. [2]
d.
7. Two players Rowan (Row player) and
Cologne (column player) play a zero sum
game based on the Pay-off matrix below
C1
C2
C3
R1
-2
-1
0
R2
2
0
-4
R3
4
0
-1
a) Find the optimal pure strategy for
each player. Does the game have a
stable solution?[2]
b) If Rowan plays using the maximum
strategy 50% of the time and chooses
each of the other two strategies 25%
of the time, while Cologne plays the
non-minimax strategy 30% of the
time and chooses each of the other
two strategies 35% of the time,
determine the expected value of the
game.[2]
c) Rowan plays strategies R1, R2, and
R3 with probabilities p, p and
respectively. Cologne plays strategies
C1, C2 and C3 with probabilities p,
p and respectively. Find the value
of p if the game is fair.
8. Consider the payoff table below that
shows the percentage increase in
market share for Company A for each
combination of Company A and
Company B strategies.

Compa

A1
A2

B1
4
-1

Company B
B2
B3
3
2
4
1

ny A
A3
5
-2
5
a) Assume that Company B implements
a mixed strategy by using B2 with
probability 0.5 and strategy B3 with
probability 0.5. Company B decides
never to use strategy B1.
i.
What is the expected payoff to
Company A under each of its three
strategies?
ii.
What strategies company A will use?
iii.
Determine the value of the game.
[ 10 marks ]
9. A two-person zero-sum game is given
by the pay-off matrix for player X
Player Y
Y1
Y2
Y3
Player
X1
-4
-1
3
X
X2
3
4
7
X3
2
1
5
a) Determine whether the game is a
fair game. [3 marks]
b) Determine the optimal strategy for
each player. [2 marks]
c)
10.Ali and Bob play a zero-sum game.
The pay-off matrix for Ali is shown
below.
Bob
I
II
III
IV
I
2
3
2
5
Ali
II
-3
1
3
-4
III
4
1
6
0
IV
-3
-2
4
-5
(a) Determine the play-safe strategy for
each player and deduce that the game
is unstable. [3 marks]
(b) Use the eliminating the dominated
strategies and graphical method, find
the optimal mixed strategies for Ali and
Bob. [9 marks]