19. Equilibria in Normal Form Games
There exists everywhere a medium in things,determined by equilibrium.
First, let’s look at what is known as a normal form description of a game. Normal form games are good places to start because they are rather simple. In this form, you represent the game as a table or matrix. One player’s options are presented by the matrix’s rows. The other player (given a two-player game) has options represented by the columns of the matrix. Where each intersects is the result of the game with each player receiving a payoff.
Where game theory is useful is in determining not what a player can do, but what a player will do. You need to make a bunch of assumptions in order to determine this, but it can help ...