How Decision Making is Actually Science: Game Theory Explained

Watching this in 2020. "Did you interact with anyone today?" No. No I did not.

There is a big mistake in this video. The definition of "Nash equilibrium" in the video is actually the definition for a strictly dominant strategy: "A player in a game has found A STRICTLY DOMINANT STRATEGY when they make the choice that leaves them better off no matter what their opponents decide to do.” In the prisoner's dilemma, each player has a strictly dominant strategy to confess--it's better NO MATTER what others do. A Nash equilibrium, by contrast, is when each player has a strategy that is better GIVEN what others are doing. Each person is doing the best to outguess others, and mutually each person is playing a best response. Here's an example to illustrate the difference. Do you drive on the left side of the road or the right? There is no choice better for you "no matter" what others do. Your best choice is to match what others do: you drive on the left if others do, and you drive on the right if others do too. This game does not permit a strictly dominant strategy. But there are two Nash equilibria--when everyone drives on the left, or everyone drives on the right. Very few games have strictly dominant strategies. In contrast, every game* has a Nash equilibrium (*under certain conditions) Nash proved the existence of the equilibrium in his doctoral thesis at Princeton, and that is work for which he was recognized with a Nobel Prize and is the subject of the book/movie "A Beautiful Mind." I mostly liked this video and the Shapley value example is good. But the definition of the Nash equilibrium is a big error--perhaps include a note or annotation?

"Did you interact with anyone today?" ha... ha...

Love how you break-down what is common sense to most.. it really forces me to understand why I think a certain way in situations where I'd normally think automatically

If I were a betting man I'd say that there is at least one comment in here referencing Matthew Patrick.

This is probably one of the more concise, bitesize videos on understanding game theory, very helpful.

I'm glad you guys went with SciShow Psych. I've been loving those vids!

5:55 "DUMMY PLAYERS HAVE ZERO VALUE" Luigi would like to speak with you.

HELLO INTERNET; WELCOME TO GAME THEORY!

As someone who's been stuck watching intro game theory videos for about 5 years, this is the best one I've seen to date. Very clear and concise description, Sci.

Ive be running this in my head to make situations work for me without even realising it was a thing.

Legend. Took my thoughts out of my mouth, I didn't think people has gone deep into studying this stuff wow!

Great video on explaining the basics of Game Theory! Would you ever do a part two which explained the Normal Form vs. Extensive Form, further exploration of the Nash Equilibrium, or even the math behind certain ideas like the Cobb-Douglas utility function?

Thank you, Hank! You totally just gave me a new title for my podcast. I'll let you know what it is once I get it rolling.

Thank you so much for the de-obfuscating a very complicated subject that to be honest I've never even started to get, until now. Thank you again!

that example reminds me of the game show Friend or Foe. two players have acquired a certain amount of money based on their performance in the game. Then at the end they make a secret decision. If they both choose the Friend option, then they split the winnings 50/50. If one chooses Friend and the other chooses Foe, then the person who chose Foe gets all the winnings and the other person leaves with nothing. If both people choose Foe, they both leave with nothing

I can't be the only one expecting a matpat crossover

Can we do a part 2 to this. I love this. :D

I had to make a presentation on Game Theory. Your video really helped me to understand the concepts. Thank You!

Very very good demonstration of SIMPLE Game Theory. A bit fast paced for a beginner, IMO, but straight to the point and easy to comprehend! Awesome video.