Solving 0-Sum Games

While the focus of this course is not on 0-sum games, you still might find it enlightening (or at least fun) to play a bit with some of the examples from the course notes. Recall the poker game we analyzed this week:

Each of two players is dealt a high or low card, with equal probability. Each player antes $1, then looks (privately) at his or her own card. Player I (the dealer) may either fold, or bet $1. If I bets, then II may fold, call (matching the bet), or raise $1 (putting two more dollars on the table). Finally, if II raises, I may either fold or call (matching the $1 raise). A player wins the pot if his opponent folds, or if a call occurs and he holds a higher card than his opponent. If they hold equal cards, a call results in the pot being split evenly.

After a bit of analysis, we were able to reduce the strategic choice problem to a pair of strategies for each player, and we then "solved" the game by hand. If you'd like to see a spreadsheet that uses Excel's "Solver" tool to solve the same game, download this workbook.