Chicken Game

Two drivers race toward each other. The one who swerves first is the "chicken." Winning strategy: credibly remove your own option to swerve (e.g., throw the steering wheel out the window). Limiting your own choices can put you in a stronger position.

Stag Hunt

Two hunters choose between cooperating for a stag (big reward) or individually hunting rabbits (small, certain reward). Cooperation requires trust.

Mixed Strategy Equilibrium

Like a penalty kick: if you always shoot right, the goalkeeper always dives right. Being unpredictable becomes the optimal strategy.

Ultimatum Game & Dictator Game

• Ultimatum: One person proposes a split; the other can accept or reject (both get nothing). People reject unfair offers despite economic rationality.
• Dictator: One person decides the split with no recourse for the other. Most still share — showing fairness and altruism beyond pure self-interest.

Repeated Games

When you'll meet again tomorrow, today's betrayal invites tomorrow's retaliation. Long-term relationships make cooperation the best strategy.

Nash Equilibrium

A state where no player benefits from unilaterally changing strategy. Example: two companies both overspending on ads because neither dares to cut first.

Adverse Selection

Information asymmetry (e.g., used car sellers know condition, buyers don't) leads to "lemon markets" where only low-quality products remain.

Prisoner's Dilemma

Each prisoner's rational choice (betrayal) leads to a worse outcome than mutual cooperation. Individual rationality fails to achieve collective optimality.

Zero-Sum vs. Non-Zero-Sum Games

• Zero-sum: One's gain equals another's loss.
• Non-zero-sum: Cooperation can grow the pie so everyone gets more. Most real-world situations are non-zero-sum.

Signaling Game

Job market: degrees, certifications, and portfolios serve as signals. Easy for capable people to produce, hard for incapable people — that's what makes them credible signals.

Tragedy of the Commons

Freely available resources get overused until they're depleted. Everyone acting in self-interest leads to collective ruin.

Public Goods Game

Everyone contributes to a common fund that grows and is redistributed. Free-rider problem: if too many think "I don't need to contribute," the public good collapses.

War of Attrition

Two firms endure losses waiting for the other to quit. The one who lasts longer wins, but both suffer enormous costs in the process.

Game theory extends far beyond abstract math — it's deeply connected to human psychology, social behavior, economics, and everyday decisions.