The Bayesian Game

A Bayesian game is a strategic situation where players have private or incomplete information about others, such as their preferences or abilities. Each player forms beliefs about the unknown factors based on available evidence, and these beliefs influence their decisions. The game combines strategic decision-making with probabilistic reasoning, allowing players to optimize their actions considering both their own information and their expectations about others. It’s often used to model real-world scenarios like auctions, negotiations, or markets where uncertainty and strategic thinking coexist.