Two Game Theory Terms
A game in game theory is considered a potential game if the incentive of all players to change their strategy can be expressed in one global function, the potential function. The concept was proposed by Dov Monderer and Lloyd Shapley. Games can be either ordinal or cardinal potential games. In cardinal games, the difference in individual payoffs for each player from individually changing one's strategy ceteris paribus has to have the same value as the difference in values for the potential function. In ordinal games, only the signs of the differences have to be the same.A game is a common interest game if it has a unique payoff-dominant outcome. Thus, a pure coordination game is not a common interest game, but ranked coordination is.
To view the post on a separate page, click: at 6/11/2008 10:54:00 AM (the permalink).