This chapter introduces strategic form games, which provide a framework for the analysis of strategic interactions in multi-agent environments. We present the main solution concept in strategic form games, Nash equilibrium, and provide tools for its systematic study. We present fundamental results for existence and uniqueness of Nash equilibria and discuss their efficiency properties. We conclude with current research directions in this area.
IntroductionMany problems in communication, decision, and technological networks as well as in social and economic situations depend on human choices, which are made in anticipation of the behavior of the others in the system. Examples include how to map your drive over a road network, how to use the communication medium, and how to choose strategies for resource use and more conventional economic, financial, and social decisions such as which products to buy, which technologies to invest in, or who to trust. The defining feature of all of these interactions is the dependence of an agent's objective (payoff, utility, or survival) on others' actions. Game theory focuses on formal analysis of such strategic interactions. Here, we will review strategic form games, which focus on static game-theoretic interactions and present the relevant solution concept.
Strategic Form GamesA strategic form game is a model for a static game in which all players act simultaneously without knowledge of other players' actions.
Definition 1 (Strategic Form Game)A strategic form game is a triplet hI; .S i / i2I ; .u i / i2I i where:1. I is a finite set of players, I D f1; : : : ; I g. 2. S i is a nonempty set of available actions for player i . 3. u i W S ! R is the utility (payoff) function of player i where S D Q i2I S i .