Economics
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Game Theory Series
Definitions

Normal form gameExtensive form gameCooperative game


Equilibrium Concepts
Nash equilibriumSubgame perfect Nash equilibriumBackwards induction


Games
Prisoner's dilemmaChicken gameHawk-Dove gameUltimatum gameCoordination gameDictator game

A chicken game is a game theory set up that typically decribes two players heading toward each other. If the players continue on the same path, they bump into each other; if one swerves out of the way and other doesn't, the swerver "loses" and is labeled the chicken, while the second, implicitly braver player, wins.

The payoff matrix is as follows:

Swerve Continue Straight
Swerve 0, 0 -1, +1
Continue Straight +1, -1 -2, -2

(This set up implies two players are merely walking towards each other; if they were, say, driving, the Continue Straight/Continue Straight choice would constitute a much higher negative payoff. While these differences in payoffs matter for calculating mixed strategy Nash equilibrium, only order matters for regular Nash equilibrium)

Analysis[]

The NE in this scenario are Continue Straight/Swerve and Swerve/Continue Straight.

See Also[]