The experience of learning game theory

Part 1: The experience of learning game theory

In society, the confrontation and contest between people is an unavoidable topic. Only by facing these problems, individuals are more likely to have a chance to succeed. In all confrontation and contest, its success or failure often depends on three basic factors: opportunity or luck, physical strength and intelligence. Tossing and winning by tossing a coin is a game that relies purely on personal luck; the outcome of a 100-meter race basically depends on the individual's overall skills; while basketball, war, and other confrontations, although also affected by luck, physical fitness is also important. But the more important factor in determining the outcome is the contest of brain skills.
Mind skills are a strategic skill, or an accomplishment in strategy. Since most of the confrontation in the world is related to brain skills, it is necessary to study how to strategically choose one's own actions in confrontational situations. Today, game theory is a study of people's strategic behavior in an interactive situation. In fact, everyone is dealing with others every day, or competing or cooperating. In such a highly interactive environment, whether or not a person knows game theory, he is constantly playing against others, whether it is his parents, relatives, brothers, teachers or mall opponents, political enemies... I don't know what game theory is, but he is often confronting and contesting with others, playing one game after another. The survival instinct also makes people learn a lot of game skills without knowing it.
However, the game skills learned through instinct are neither systematic nor quite laborious. Therefore, it is necessary to learn strategic skills in the most cost-effective way. The most economical way is to learn the knowledge of game theory directly. No wonder the economist Samuelson said: "To be a literate person in modern society, you must have a general understanding of game theory." In fact, not only the average person should understand game theory, experts in various fields. More should understand game theory - the history of the second half of the 20th century shows that game theory has been very successful in military, political, business, law, economics, biology, psychology, sociology, history and many other fields. . Among them, the use of economics, biology, politics and military has made considerable achievements. In 1994 and 2005, the Nobel Prize in Economics twice ignored game theory, and there was no reason.
However, for most people, learning game theory is not an easy task. Because formal game theory is often expressed in mathematical language, most people in society have mathematical phobias. Although the form of mathematics is so beautiful for a few people, most people look at the learning of game theory. It is a difficult and painful thing to do. In fact, game theory is such an interesting study. It is really inappropriate to regard game theory as a painful thing.
We should learn happily and learn game theory happily. This is actually something we can do, because the basics of the game do not require advanced mathematics. However, if we are proficient in this part of game theory, it will be of great benefit to our study and work.
I feel that the time of a short semester is only a little understanding of the unique course of game theory. Despite this, I learned a way to think, analyze, judge, and solve problems from a game perspective. Just like the phenomenon of the prisoner's game, I may have been able to guess the result before, but this is just knowing it but I don't know why. However, it can be different now. I can use the game theory knowledge I have learned to explain similar problems and understand the essence.

Part 2: Experience in learning game theory

I have learned game theory for a period of time. In some thought processes, I may also consciously and unconsciously use some game theory ideas. There are two prominent experiences.
First, formulate policies or rules of the game to ensure that everyone is motivated to participate.
This comes from the concept of “Nash Equilibrium”, which is of course simple. But I personally feel that the truth that I have known before—making the rules of the game to ensure that everyone is motivated” is simple acceptance, no logical proof, or, at the intuitive level, that this is correct, but does not recognize it. Why right?
There is a book saying that future economists must know the concept of "Nash Equilibrium". Otherwise, it is not an economist, or that it understands the "Nash Equilibrium", just like playing with the "price" is economics. The basic skills of the home. I agree.
The agreement must be automated.
Second, never be a fool.
This comes from the subgame perfect Nash equilibrium. A reasonable sequence of behaviors must be reasonable at every step. Even if there are some defects, we must consider the problem from the "shake hand balance" idea, so that you should not use the "trigger strategy" at will, to ensure that you are good.
If you treat others as fools, you are losing yourself, just like the story of selling cats.
It seems to be dangerous to regard the technical system of game theory as a worldview, but I must pay attention to the truth.
The above is a little experience, I hope to be able to throw bricks and jade.

Chapter 3: Game Theory Learning Thoughts and Reflections

The purpose of learning game theory is not only to win a better ending, but also to enjoy the process of game analysis.
First guess a brain teaser for everyone.
Q: Under what circumstances is zero greater than two, two greater than five, and five greater than zero?
The answer is: when playing the game "Stone. Scissors. Cloth".
The game is to use this kind of game thinking to break through the seemingly unchangeable situation and solve the serious problem of reality. In the game, each participant strives for the best interests under certain conditions. The strong may not win the prize, and the weak may not have a good day. Because in the game, especially in the game of multiple participants, the results depend not only on the strength and strategy of the participants, but also on the constraints and strategies of other participants. That is to say, in real life, if you want to counterattack, it is very helpful and necessary to learn and master the necessary knowledge of game theory.
In fact, the game process is nothing but a daily phenomenon. In our daily life, we often need to analyze the wishes of others to make reasonable behavior choices. The so-called game is the process in which an actor chooses certain behaviors or strategies under certain environmental conditions and rules, and implements and obtains corresponding results. For example, if you are a Ph.D., when faced with the pressure of the boss's task and the choice of the call of the cute sister paper, the application of the necessary game theory knowledge may help you pass the security. Of course, in such a three-node game relationship, you are in an extremely weak position, often only self-seeking.
Game theory is very versatile. Game theory was originally a branch of mathematical operations, and its research used many mathematical tools, which seemed to form a gap that hindered our beginners and game theory. But the great Marx said: "A science can only be truly perfect when it is successfully applied." In the face of this gap, we must not only learn mathematical formulas and theories, but also ignore one. The obvious truth: a person who can't program can still become a master of computer application. Without deep knowledge of mathematics, we can also become a master of strategy in life through the study of game theory. Just as Sun Hao did not learn advanced mathematics, but this does not affect his use of strategies to help Tian Ji win horse racing. So I have been very calm about the many mathematical formulas and algorithms in this lesson, because I believe that as long as I master the essence of game theory, the teacher will not let me hang up.
Game theory is first and foremost a set of logics that we think about the real world, and secondly is the mathematical form that rigorously sets this logic. The purpose of game theory is in clever strategies, not solutions. We study the purpose of game theory. Not only to win a better ending, but also to enjoy the process of game analysis. After all, game theory is only a tool for analyzing problems. It is enough to use this tool to simplify the problem and make the analysis of the problem clear and clear.
The heroic doctors, in order to counter the attack of the bunker, for the boss's task, for the sister paper's favor, everyone must not only learn to master this course, pass the exam smoothly, but also apply the game's ideas in daily life, become a Game master.

Part 4: Experience in learning game theory

In society, the confrontation and contest between people is an unavoidable topic. Only by facing these problems, individuals are more likely to have a chance to succeed. In all confrontation and contest, its success or failure often depends on three basic factors: opportunity or luck, physical strength and intelligence. Tossing and winning by tossing a coin is a game that relies purely on personal luck; the outcome of a 100-meter race basically depends on the individual's overall skills; while basketball, war, and other confrontations, although also affected by luck, physical fitness is also important. But the more important factor in determining the outcome is the contest of brain skills.
Mind skills are a strategic skill, or an accomplishment in strategy. Since most of the confrontation in the world is related to brain skills, it is necessary to study how to strategically choose one's own actions in confrontational situations. Today, game theory is a study of people's strategic behavior in an interactive situation. In fact, everyone is dealing with others every day, or competing or cooperating. In such a highly interactive environment, whether or not a person knows game theory, he is constantly playing against others, whether it is his parents, relatives, brothers, teachers or mall opponents, political enemies... I don't know what game theory is, but he is often confronting and contesting with others, playing one game after another. The survival instinct also makes people learn a lot of game skills without knowing it.
However, the game skills learned through instinct are neither systematic nor quite laborious. Therefore, it is necessary to learn strategic skills in the most cost-effective way. The most economical way is to learn the knowledge of game theory directly. No wonder the economist Samuelson said: "To be a literate person in modern society, you must have a general understanding of game theory." In fact, not only the average person should understand game theory, experts in various fields. More should understand game theory - the history of the second half of the 20th century shows that game theory has been very successful in military, political, business, law, economics, biology, psychology, sociology, history and many other fields. . Among them, the use of economics, biology, politics and military has made considerable achievements. In 1994 and 2005, the Nobel Prize in Economics twice ignored game theory, and there was no reason.
However, for most people, learning game theory is not an easy task. Because formal game theory is often expressed in mathematical language, most people in society have mathematical phobias. Although the form of mathematics is so beautiful for a few people, most people look at the learning of game theory. It is a difficult and painful thing to do. In fact, game theory is such an interesting study. It is really inappropriate to regard game theory as a painful thing.
We should learn happily and learn game theory happily. This is actually something we can do, because the basics of the game do not require advanced mathematics. However, if we are proficient in this part of game theory, it will be of great benefit to our study and work.
I feel that the time of a short semester is only a little understanding of the unique course of game theory. Despite this, I learned a way to think, analyze, judge, and solve problems from a game perspective. Just like the phenomenon of the prisoner's game, I may have been able to guess the result before, but this is just knowing it but I don't know why. However, it can be different now. I can use the game theory knowledge I have learned to explain similar problems and understand the essence.

Part V: Learning Experience in Game Theory——Analysis of Stock Technology from Game Theory

Technical analysis theory has been widely used in stock market analysis, especially in a short-cycle market like China, where people seem to be more enthusiastic about technical analysis. The traditional technical analysis theory represented by Dow theory, wave theory, and morphological analysis theory is basically in a state of stagnation since Dow Jones and Eliot. Although the content is constantly enriched, it is basically at the same level. There is no qualitative breakthrough in transforming the form.
I think, in the final analysis, it is not the problem of technical analysis itself, but the object of technical analysis - the nature of the stock market itself. Specifically, the traditional technical analysis theory implies a problematic theoretical premise. Their research ideas are essentially considering the stock market as an objective system that is not affected by the participants' own behavior, without considering people. The impact of the operation on the stock market. As an approximation, such processing can bring convenience to research, and can also produce a batch of valuable research results, but this inaccurate approximation is not conducive to in-depth study of the market.
After learning the game theory, I seem to have a deeper understanding of this issue. In fact, the market consists of thousands of investors who interact and influence each other to form an inseparable whole that is closely related to each other. These people who participate in the market are in a psychological game of each other, and everyone’s operations are Inevitably affects the movement of the stock market, especially when the amount of funds is relatively large, the impact on the market is greater. The game between these large households is directly related to the correctness of technical analysis. People who participate in the market have their own thoughts, sometimes even irrational. In China, we will see another force challenging the authority of technical analysis, that is, the power of the government.
A very simple example is a game of trust in technical analysis. In the opinion of those who believe in technical analysis, the reason why technical analysis is correct is that in the end, many people do it according to the conclusion of technical analysis. As for these conclusions, it really comes true. The following figure is our common pressure line theory, and we will build a simple game model.
The two sides of the game are the majority of retail investors and institutions. Our game process is like this: Assume that at point B, the stock price just goes to the tangent theory pressure line. At this time, the organization faces two choices: to raise the stock price and not to raise the stock price. The retailer faces two choices: follow-up buy and no follow-up. The game can be described in the following table.
Large institutional
Retail investors are not rising
Follow up
Do not follow the deficit
In the table, utility only represents the profit and loss situation of retail investors, because considering that the stock market is a zero-sum game, it is not necessary to consider the interests of both parties. As can be seen in the table, retail investors can earn only if the large institutions choose to raise the stock price, and at this time the retail investors decisively follow up.
In this game, we can see that if investors believe in technical analysis, they should not operate or sell at point B, and when the other party in the game is uncharacteristically elected to raise the stock price at this time. At the same time, the pressure of point B will be broken. At this time, investors who follow the technical analysis will choose to sell or not to buy, and then they will not be able to get the benefits. The pressure line of the tangent theory will be easily broken. This process makes the theory of pressure lines have the potential to be broken. That is, the technical analysis has failed.
The above example is just a simple game analysis.
Relevant scholars use game theory to regard the stock market as a competition, investors are in game confrontation, and investment decision is a game calculation process. Game calculation is different from people's habit of thinking according to scientific laws. The system it faces is not a change of zombie according to a law, but a possible living system with multiple changes and development.
I just briefly talked about the role of game theory in stock market analysis from the perspective of the effectiveness of technical analysis. Of course, it is not enough to achieve skilled application. However, the idea of ​​game theory has made me have the consciousness of the opponent. There are also rivals in the stock market. In my opinion, if it is not a big bull market, the stock market is just a simple zero-sum game. The "game" in this is the game, the game between the opponents. Therefore, from the perspective of game theory, the stock market is actually the result of many opponents' game. The technical analysis is only the product of the game. Of course, the actual effect of technical analysis is also the result of the game. In this case, it is not difficult to understand.