Normal Form Games A normal form game is a strategic game in which players have a finite set of actions and the outcome of each player's action is independen...
Normal Form Games
A normal form game is a strategic game in which players have a finite set of actions and the outcome of each player's action is independent of the actions of all other players. Normal form games have a set of players, a set of actions each player can take, and a set of payoffs for each combination of actions and outcomes.
Nash Equilibrium
A Nash equilibrium is a set of strategies for each player in which each player's best response is the same as their best response given the strategies of all other players. In other words, players have perfect information and are fully aware of the actions and strategies of all other players.
Key Differences between Normal Form Games and Nash Equilibrium
In normal form games, players have a finite set of actions, while in Nash equilibrium strategies, players have a finite set of actions.
In normal form games, the outcome of each player's action is independent of the actions of all other players, while in Nash equilibrium the outcome of each player's action depends on the actions of all other players.
In normal form games, players do not need to know the strategies of all other players, while in Nash equilibrium players need to know the strategies of all other players.
Examples
The prisoner's dilemma is a classic example of a normal form game.
The Nash equilibrium for the prisoner's dilemma is for both players to defect (prison the other player).
In the game of chess, each player's best response is to move a piece if their opponent moves a piece. This strategy ensures that neither player has an incentive to deviate from their best response