Game Theory & Strategic Interaction

11 domain-specific abstractions whose origin domain is Game Theory & Strategic Interaction.

• Cheap Talk — Costless, non-binding communication whose credibility rests entirely on incentive alignment: as the gap between sender and receiver interests widens, the information a costless message can carry shrinks through ever-coarser partitions down to meaningless babble.
• Dictator Game — An experimental protocol where one participant unilaterally splits an endowment with a powerless recipient — by stripping away every strategic lever, it forces any positive transfer onto the non-strategic ledger, so its lattice of single-bit variants decomposes the sources of pro-social behaviour.
• Dollar Auction — Mechanize the escalation trap with one rule change — the second-highest bidder also pays and gets nothing — so that backward induction makes each additional bid locally rational and rational players escalate past the prize's value.
• Dominated Strategy — Rule out an action that yields a lower payoff than some alternative for every possible profile of opponents' actions — a belief-free test requiring no model of the opponent, licensing iterated elimination and the dominant-strategy robustness that mechanism design targets.
• El Farol Bar Problem — The congestion model in which each agent independently decides whether to attend a capacity-limited bar, enjoyable only if uncrowded — so any prediction rule shared by all self-destructs, and the system resolves only through heterogeneous inductive predictors rather than convergence.
• Grim Trigger — A repeated-game strategy that cooperates every period until the opponent defects once, then switches to permanent defection forever — the severity-maximal, zero-forgiveness deterrent that sustains cooperation whenever the discount factor is high enough.
• Guess ⅔ of the Average — A single-shot game where each player picks a number closest to two-thirds of the group's mean — its Nash equilibrium of zero is never reached, and because each level of iterated best-response leaves a distinct numerical signature, the modal guess reads off a population's depth of strategic reasoning.
• Matching pennies — Force randomization with the smallest strictly-competitive game — a matcher wins on agreement, a mismatcher on difference — where the best-response cycle admits no pure equilibrium and each player must mix to leave the opponent indifferent.
• Traveler's Dilemma — Isolate recursion depth as the variable governing whether an iterated-dominance equilibrium predicts behavior — using the same weak-dominance move as the Prisoner's Dilemma chained 98 times, so the $2 prediction evaporates while behavior tracks an incentive gradient the concept is blind to.
• Trembling-Hand Perfect Equilibrium — Filter the Nash equilibria by giving every action a vanishing positive probability of being played by mistake and keeping only those that survive as the tremble shrinks to zero, discarding equilibria propped up by threats that never have to be carried out.
• Volunteer's Dilemma — A game where a shared good is produced if any single member pays a private cost to provide it, so each prefers someone else volunteer — and, counterintuitively, larger groups grow no more (often less) likely to produce it.