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    Description of Bluffing Game

    Uploaded by

    Divyesh Dixit
    The document describes a bluffing game and asks how players would play given what their opponent believes about strategy. There are two scenarios: 1. If the opponent believes the strategy is to raise with a good card and not raise with a bad card, player B should fold if their opponent raises to minimize losses, while player A should raise with good cards and not raise with bad cards. 2. If the opponent believes the strategy is always to raise, player B should call because there is a higher chance their opponent has a bad card, while player A should raise regardless of their card to exploit what their opponent believes.

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    Description of Bluffing Game

    Uploaded by

    Divyesh Dixit
    90 views4 pages
    The document describes a bluffing game and asks how players would play given what their opponent believes about strategy. There are two scenarios: 1. If the opponent believes the strategy is to raise with a good card and not raise with a bad card, player B should fold if their opponent raises to minimize losses, while player A should raise with good cards and not raise with bad cards. 2. If the opponent believes the strategy is always to raise, player B should call because there is a higher chance their opponent has a bad card, while player A should raise regardless of their card to exploit what their opponent believes.

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    Bluffing Game

    Original Title

    Bluffing Game

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    The document describes a bluffing game and asks how players would play given what their opponent believes about strategy. There are two scenarios: 1. If the opponent believes the strategy is to raise with a good card and not raise with a bad card, player B should fold if their opponent raises to minimize losses, while player A should raise with good cards and not raise with bad cards. 2. If the opponent believes the strategy is always to raise, player B should call because there is a higher chance their opponent has a bad card, while player A should raise regardless of their card to exploit what their opponent believes.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    90 views4 pages

    Description of Bluffing Game

    Uploaded by

    Divyesh Dixit
    The document describes a bluffing game and asks how players would play given what their opponent believes about strategy. There are two scenarios: 1. If the opponent believes the strategy is to raise with a good card and not raise with a bad card, player B should fold if their opponent raises to minimize losses, while player A should raise with good cards and not raise with bad cards. 2. If the opponent believes the strategy is always to raise, player B should call because there is a higher chance their opponent has a bad card, while player A should raise regardless of their card to exploit what their opponent believes.

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    Bluffing Game

    We will play the Bluffing Game next class. As a preparation, please think about the game, answer the
    questions on the opposite side,

    Description of Bluffing Game


    The game is a very simple sort of poker. Be prepared to play either role (A or B)
    Both players put $100 (hypothetical money) into the pot before play begins
    Player A receives a card. 1/3 of time its Good Card, 2/3 of time its Bad Card. (Player B does
    not get a card.)
    After getting the card, Player A can either bet $100 more (Raise) or Not
    If Not Raise, game ends and Player A wins the pot (for net winning +100) if Good Card and loses
    pot (for net 100) if Bad Card. This is a zero-sum game, so B loses whatever A wins and vice
    versa.
    If Raise, Player B either gives up (Fold) or puts in an extra $100 also (Call)
    oIf Fold, Player A wins the pot automatically (payoff +100)
    oIf Call, Player A wins the pot if Good Card (payoff +200) and loses the pot if Bad Card
    (payoff -200)

    How would you play?


    Suppose that, before the game is played, your opponent is given the chance to tell you how she
    thinks the game should be played. (Suppose for our purposes that she tells the truth.)
    1. The way to play is to Raise given a Good Card and Not Raise given a Bad Card. This
    maximizes ones winnings and minimizes ones losses.

    If you are player B, how would you play, given that this is how she thinks one should play?
    If you are player A, how would you play the game, given that this is how she thinks you play
    the game?

    2. The way to play is always Raise. That gives you the opportunity to win big. If you have a
    Good Card, then you can win +200 if opponent calls and if you have a Bad Card you can still
    win if your opponent Folds, getting +100 instead of 100.

    If you are player B, how would you play, given that this is how she thinks one should play?
    If you are player A, how would you play the game, given that this is how she thinks you play
    the game?

    SOLUTION:
    Assumptions:
    The opponent tells the truth and will always act as per what she has said. Even if the game is
    repetitive, the opponent will not deter from her statement and hence her actions are predictable.

    What opponent
    believes?

    Who am
    I?

    The way to play is to


    Raise given a Good Card Player B
    and Not Raise given a
    Bad Card.

    -ditto-

    -ditto-

    The way to play is


    always Raise. That gives
    you the opportunity to
    win big.

    Player B

    Player A

    What
    opponent
    does?

    What I will
    do?

    Remarks

    Opponent (Player A) plays first. She raises. I


    know that she raises only if she has a good
    card. Hence if I call, I will lose $200. If I
    fold, I will lose only $100. Hence, I will fold
    to minimize losses.

    Raise

    Fold

    No raise

    Nothing

    The game ends without me playing.

    Raise

    Since my opponent (Player B) believes that


    I will raise only if I have a good card, I can
    safely raise whether I have a good or bad
    card. Player B will then definitely fold. I
    will then get $100.

    Does not
    matter

    If my opponent (Player A) raises, with a


    probability 2/3, he has bad card. Hence,
    expected payoff for me if I call is 2/3*2001/3*200 = +67.67. Hence, I will call.

    Player B

    Raise

    Call

    -ditto-

    Player B

    No raise

    Nothing

    The game ends without me playing.

    -ditto-

    Player A

    Does not
    matter

    Raise if
    Good Card,
    Not Raise if
    Bad Card

    Since my opponent (Player B) believes that


    I will raise if I have a bad or good card, he
    will always call. Hence, it is in my interest
    to raise if I have a good card and not raise if
    I have a bad card. This way my payoff will

    be -2/3*100 + 1/3*200 = 0.

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