Introduction: Five First Lessons

We introduce Game Theory by playing a game. We organize the game
into players, their strategies, and their goals or payoffs; and we
learn that we should decide what our goals are before we make
choices. With some plausible payoffs, our game is a prisoners’
dilemma. We learn that we should never choose a dominated strategy;
but that rational play by rational players can lead to bad
outcomes. We discuss some prisoners’ dilemmas in the real world and
some possible real-world remedies. With other plausible payoffs,
our game is a coordination problem and has very different outcomes:
so different payoffs matter. We often need to think, not only about
our own payoffs, but also others’ payoffs. We should put ourselves
in others’ shoes and try to predict what they will do. This is the
essence of strategic thinking.