Gaming the System

Fundamentals of Game Theory

Game Theory

"... is the study of mathematical models of strategic interaction between rational decision-makers. It has applications in all fields of social science, as well as in logic and computer science."

The Prisoner's Dilemma

"... is a standard example of a game analyzed in game theory that shows why two completely rational individuals might not cooperate, even if it appears that it is in their best interests to do so."

The Game

"Two members of a criminal gang are arrested and imprisoned. Each prisoner is given the opportunity either to betray the other by testifying against them, or to cooperate with the other by remaining silent."

Choice and Consequence

Tournament Rules

  • Each pair gets 5 decisions total
  • Take your points after each decision
  • After your last decision, count your points
  • The player with the fewest points is eliminated
  • Ties are settled with a coin toss
  • The last remaining player wins a prize!

Changing the Rules

  • Each pair gets 5 decisions total
  • Take your points after each decision
  • After your last decision, count your points
  • Write the number of points for the match on a piece of paper
  • All players continue playing
  • The player with the most points, after 4 matches have been played, wins!

Bitcoin Mining

  • Miners are tasked with solving a computational task
  • When the task is solved, the miner can create a new "block"
  • A block is a chunk of data (transactions)
  • The miner decides which transactions to include in the block
  • And the miner awards themselves 12.5 bitcoin
  • If the miner cheats, they lose the reward

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