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Introduction To Game Theory A Discovery Approach 1st Edition by Jennifer Firkins Nordstrom Instant Download

The document is an introduction to the textbook 'Introduction to Game Theory: A Discovery Approach' by Jennifer Firkins Nordstrom, which is available for free through the LibreTexts Project. It outlines the structure and goals of the course, emphasizing the use of game theory to model human behavior in various contexts, while also providing a discovery-based learning format. The text includes various chapters covering topics such as zero-sum games, non-zero-sum games, and applications of game theory in popular culture.

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100% found this document useful (2 votes)
39 views78 pages

Introduction To Game Theory A Discovery Approach 1st Edition by Jennifer Firkins Nordstrom Instant Download

The document is an introduction to the textbook 'Introduction to Game Theory: A Discovery Approach' by Jennifer Firkins Nordstrom, which is available for free through the LibreTexts Project. It outlines the structure and goals of the course, emphasizing the use of game theory to model human behavior in various contexts, while also providing a discovery-based learning format. The text includes various chapters covering topics such as zero-sum games, non-zero-sum games, and applications of game theory in popular culture.

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INTRODUCTION TO
GAME THEORY: A
DISCOVERY APPROACH

Jennifer A. Firkins Nordstrom


Lin eld College
Introduction to Game Theory: a Discovery
Approach (Nordstrom)
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This text was compiled on 10/01/2023
TABLE OF CONTENTS
Licensing
Preface

1: What is Game Theory?


1.1: Players and Strategies
1.2: Game Matrices and Payoff Vectors

2: Two-Person Zero-Sum Games


2.1: Introduction to Two-Person Zero-Sum Games
2.2: Dominated Strategies
2.3: Probability and Expected Value
2.4: A Game of Chance
2.5: Equilibrium Points
2.6: Strategies for Zero-Sum Games and Equilibrium Points
2.7: Popular Culture: Rationality and Perfect Information

3: Repeated Two-Person Zero-sum Games


3.1: Introduction to Repeated Games
3.2: Mixed Strategies: Graphical Solution
3.3: Using Sage to Graph Lines and Solve Equations
3.4: Mixed Strategies: Expected Value Solution
3.5: Liar's Poker
3.6: Augmented Matrices
3.7: Undercut

4: Non-Zero-Sum Games
4.1: Introduction to Two-Player Non-Zero-Sum Games
4.2: Prisoner's Dilemma and Chicken
4.3: A Class-Wide Experiment
4.5: Another Multiplayer Experiment
4.6: Volunteer's Dilemma
4.7: Repeated Prisoner's Dilemma
4.8: Popular Culture: Prisoner's Dilemma and Chicken

Index
Glossary
Detailed Licensing
References

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Licensing
A detailed breakdown of this resource's licensing can be found in Back Matter/Detailed Licensing.

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Preface
Many colleges and universities are offering courses in quantitative reasoning for all students. One model for a quantitative
reasoning course is to provide students with a single cohesive topic. Ideally, such a topic can pique the curiosity of students with
wide-ranging academic interests and limited mathematical background. This text is intended for use in such a course. Game theory
is an excellent topic for a non-majors quantitative course as it develops mathematical models to understand human behavior in
social, political, and economic settings. The variety of applications can appeal to a broad range of students. Additionally, students
can learn mathematics through playing games, something many choose to do in their spare time!
This text particularly explores the ideas of game theory through the rich context of popular culture. At the end of each chapter is a
section on applications of the concepts to popular culture. It suggests films, television shows, and novels with themes from game
theory. The questions in each of these sections are intended to serve as essay prompts for writing assignments.

Course Goals
Introduce students to the mathematics of game theory.
Teach students how to use mathematical models to solve problems in social and economic situations.
Build students' quantitative intuition.
Introduce students to the power of mathematics to frame human behavior.
Provide students an opportunity to use algebraic techniques, such as linear models and systems of equations, in game-theoretic
applications.
Provide students an opportunity to use basic ideas of probability, such as expected value, in game-theoretic applications.

Course Format
The material is presented in a discovery format, requiring students to make conjectures frequently. Each section is structured as a
class activity. Any introduction material can be read by the students, and the numbered problems or questions are to be out in class
and as homework, depending on how far a particular student progresses through the section. Most sections require students to
attempt to solve the problem before they have been provided much framework. The sections then build the necessary tools to solve
the problem or understand the key ideas. Being able to compare their original solutions and ideas to the more sophisticated
mathematical ones helps build their mathematical intuition and helps them to understand the power of using mathematics in
situations where their intuition falls short.

Suggestions for Use


This text is primarily for use in a college-level quantitative reasoning course. It can also be used for an introductory course in game
theory for the social sciences. It approaches the subject matter through an inquiry-based format. Most of the topics can be
introduced by providing the students with the activity to work through during class, followed by a discussion. Almost all of the
activities are intended to work through the concepts without additional lecture or introduction. Students with even a rudimentary
background in algebra will find the material accessible. Any necessary mathematical background can be introduced as needed.

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CHAPTER OVERVIEW

1: What is Game Theory?


“Game Theory is not about 'playing games.' It is about conflict resolution among rational but distrustful beings.” Poundstone,
Prisoner's Dilemma, p. 39.
Although we will play many games throughout this book, our goal is to understand how rational, distrustful players would play the
game. These games are meant to serve as models for situations of conflict. We will explore how to “solve” games under certain
assumptions about our players. As with any mathematical model, we will need to make assumptions about how our players will
behave, what information they have, and the constraints of the game. For example, we will assume that our players will use all
information available to them, and that players will follow the rules of the game.
Games can provide hours of recreational enjoyment, and are worth studying for this alone. However, even simple games can be
used to model political, social, and economic interactions. Understanding some foundations of game theory can help us interpret,
predict, and respond in competitive situations.
1.1: Players and Strategies
1.2: Game Matrices and Payoff Vectors

This page titled 1: What is Game Theory? is shared under a CC BY-SA 4.0 license and was authored, remixed, and/or curated by Jennifer A.
Firkins Nordstrom via source content that was edited to the style and standards of the LibreTexts platform; a detailed edit history is available upon
request.

1
1.1: Players and Strategies
In this book, most of the games will be played by two players. Each player must decide how he or she will play the game. In order
to study games mathematically, we need to make some assumptions about how the players should play the game. This allows us to
be able to better predict what our players should do. The following example illustrates the characteristics we will assume about our
players.

1.1.1: Example—Cake Division


How can two children fairly divide a cake? One classic solution is to have one child cut the cake and have the other child choose a
piece.
Why does this work? In other words, why should both children feel they received a fair share of the cake?
What are the underlying assumptions that make this process work?
1. The goal of each player is to get the largest piece. We can think of this as each player acting in his or her self-interest.
2. Both players know that the other player has the same goal, and will act to further this goal. Thus, we know that each player is
rational. Even more, each player knows the other player is rational.
We need both (1) and (2) to reach the solution that the cake is divided evenly and both children receive equal sized pieces.
The idea that players are self-interested is crucial to game theory. There are lots of other ways to play games, and those might be
worth exploring. But to get started with game theory, we must make specific assumptions and develop the mathematical context
from these assumptions.
Assumption 1: Players are self-interested. The goal is to win the most or lose the least. But what does it mean to win?
A player's payoff is the amount (points, money, or anything a player values) a player receives for a particular outcome of a game.
We say that the player's goal is to maximize his or her payoff. We should note that the maximum payoff for a player might even be
negative, in which case the player wants the least negative (or closest to 0) payoff.
It is important to recognize the difference between having the goal of maximizing the payoff and having the goal of simply
winning. Here are some examples.
1. If two players were racing, a player wouldn't just want to finish first, she would want to finish by as large a margin as possible.
2. If two teams were playing basketball, the team wouldn't want to just have the higher score, they would want to win by the
largest number of points. In other words, a team would prefer to win by 10 points rather than by 1 point.
3. In an election poll, a candidate doesn't just want to be ahead of her opponent, she wants lead by as large a margin as possible,
(especially if she needs to account for error in the polls).
It is important to keep in mind the the goal of each player is to win the most (or lose the least). It will be tempting to look for
strategies which simply assure a player of a positive payoff, but we need to make sure a player can't do even better with a different
strategy.
Assumption 2: Players are perfectly logical. A Player will always take into account all available information and make the decision
which maximizes his payoff. This includes knowing that his opponent is also making the best decision for herself. For example, in
the cake cutting game a player wouldn't cut one large piece hoping that his opponent will by chance pick the smaller piece. A
player must assume that her opponent will always choose the larger piece.
Now you may be wondering what these assumptions have to do with reality. After all, no one's perfect. But we often study ideal
situations (especially in math!). For example, you've all studied geometry. Can anyone here draw a perfectly straight line? Yet,
you've all studied such an object!
Our Goal: Develop strategies for our perfectly logical, self-interested players.

1.1.2: Developing Strategies: Tic Tac Toe

 Exercise 1.1.1 : Play the Game.


Play several games of Tic Tac Toe with an opponent. Make sure you take turns being the first player and the second player.
Develop a strategy for winning Tic Tac Toe. You may have a different strategy for the first player and for the second player. Be

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as specific as possible. You may need to consider several possibilities which depend on what your opponent does.
a. Who wins? Player 1 or Player 2?
b. What must each player do in order to have the best possible outcome?
c. How did you develop your strategy?
d. How do you know it will always work?

Let us note some characteristics of Tic Tac Toe.


There are two players.
Players have perfect information. This means each player knows what all of his or her own options are, what all of his or her
opponent's options are, and both players know what the outcome of each option is. Additionally, players know that both players
have all of this information.
This game has a solution. A solution for a game consists of a strategy for each player and the outcome of the game when each
player plays his or her strategy. In Tic Tac Toe, if both players play their best, the game will always end in a tie.
The game is finite. This means the game must end after a finite number of moves of turns. In other words, the game cannot go
on forever. A game that is not finite is called infinite. Note, an infinite game may end after a finite number of turns, but there is
no maximum number of turns or process to ensure the game ends. In Tic Tac Toe, the game must end after 9 or fewer turns.

 Exercise 1.1.2 : Perfect Information, More Examples.


Can you think of another example of a game with perfect information? What is an example of a game that does not have
perfect information?

 Exercise 1.1.3 : Finite and Infinite, More Examples.


Give some examples of finite games and infinite games.

 Definition: Strategy

A strategy for a player is a complete way to play the game regardless of what the other player does.

The choice of what a player does may depend on the opponent, but that choice is predetermined before gameplay. For example, in
the cake cutting game, it doesn't matter which piece the “chooser” will pick, the “cutter” will always cut evenly. Similarly, it doesn't
matter how the cutter cuts, the chooser will always pick the largest piece. In Tic Tac Toe, Player 2's strategy should determine his
first move no matter what Player 1 plays first. For example, if Player 1 plays the center square, where should Player 2 play? If
Player 1 plays a corner, where should Player 2 play?

 Exercise 1.1.4 : Describe Your Favorite Game

What is your favorite game?


a. Give a brief description of the game, including what it means to “win” or “lose” the game.
b. How many players do you need?
c. Do the players have perfect information for the game?
d. Is the game finite or can it go on forever?
e. Give some possible strategies for the player(s). Note, depending on the game, these strategies may not always result in a
definite win, but they should suggest a way to increase a player's chances of winning (or not losing).

We have established a few assumptions and looked at how to describe strategies in some familiar games. Not all games easily fit
into the context we will be using throughout this text. But you might keep in mind some of your favorite games and see how well
the strategies and solutions can be applied to them. In the next section, we develop some useful notation for describing most of the
games we will study.

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1.2: Game Matrices and Payoff Vectors
We need a way to describe the possible choices for the players and the outcomes of those choices. For now, we will stick with
games that have only two players. We will call them Player 1 and Player 2.

1.2.1: Example—Matching Pennies


Suppose each player has two choices: Heads (H) or Tails (T). If they choose the same letter, then Player 1 wins $1 from Player 2. If
they don't match, then Player 1 loses $1 to Player 2. We can represent all the possible outcomes of the game with a matrix.
Player 1's options will always correspond to the rows of the matrix, and Player 2's options will correspond to the columns. See
Table 1.2.1.

Table 1.2.1: A Game Matrix Showing the Strategies For Each Player

Player 2

Head Tail

Head
Player 1
Tail

 Definition: Payoff

A payoff is the amount a player receives for given outcome of the game.

Now we can fill in the matrix with each player's payoff. Since the payoffs to each player are different, we will use ordered pairs
where the first number is Player 1's payoff and the second number is Player 2's payoff. The ordered pair is called the payoff vector.
For example, if both players choose H, then Player 1's payoff is $1 and Player 2's payoff is −$1 (since he loses to Player 1). Thus
the payoff vector associated with the outcome H, H is (1, −1).
We fill in the matrix with the appropriate payoff vectors in Table 1.2.2.

Table 1.2.2: A Game Matrix Showing the Payoff Vectors

Player 2

Head Tail

Head (1, −1) (−1, 1)


Player 1
Tail (−1, 1) (1, −1)

It is useful to think about different ways to quantify winning and losing. What are some possible measures of value? For example,
we could use money, chips, counters, votes, points, amount of cake, etc.
Remember, a player always prefers to win the MOST points (money, chips, votes, cake), not just more than her opponent. If you
want to study a game where players simply win or lose (such as Tic Tac Toe), we could just use “1” for a win and “−1” for a loss.

1.2.2: Understanding the Players


Recall that we said there are two major assumptions we must make about our players:
Our players are self-interested. This means they will always prefer the largest possible payoff. They will choose a strategy
which maximizes their payoff.
Our players are perfectly logical. This means they will use all the information available and make the wisest choice for
themselves.
It is important to note that each player also knows that his or her opponent is also self-interested and perfectly logical!

 Exercise 1.2.1 : Preferred Payoffs


a. Which payoff does the player prefer: 0, 2, or −2?

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b. Which payoff does the player prefer: −2, −5, or −10?
c. Which payoff does the player prefer: −1, −3, or 0?

It may be straightforward to decide the best payoff for a player out of a list of values, and it would be great if a player could just
determine the biggest value in the table and choose that strategy. However, when there are two players a player may have to choose
a strategy more carefully, since Player 1 can only choose the row, and Player 2 can only choose the column. Thus, the outcome of
the game depends on BOTH players.

 Example 1.2.1 : A Game.

Suppose two players are playing a game in which they can choose A or B with the payoffs given in the game matrix in Table
1.2.3.

Table 1.2.3: Payoff Matrix For Exercise 1.2.2

Player 2

A B

A (100, −100) (−10, 10)


Player 1
B (0, 0) (−1, 11)

In the following exercise, we will try to determine what each player should do.

 Exercise 1.2.2 : Finding Strategies


a. Just by quickly looking at the matrix, which player appears to be able to win more than the other player? Does one player
seem to have an advantage? Explain.
b. Determine what each player should do. Explain your answer.
c. Compare your answer in (b) to your answer in (a). Did the player you suggested in (a) actually win more than the other
player?
d. According to your answer in (b), does Player 1 end up with the largest possible payoff (for Player 1) in the matrix?
e. According to your answer in (b), does Player 2 end up with the largest possible payoff (for Player 2) in the matrix?
f. Do you still think a player has an advantage in this game? Is it the same answer as in (a)?

 Example 1.2.2 : A Game.

Suppose there are two players with the game matrix given in Table 1.2.4.

Table 1.2.4: Payoff Matrix For Exercise 1.2.3

Player 2

X Y Z

A (1000, −1000) (−5, 5) (−15, 15)

Player 1 B (200, −200) (0, 0) (−5, 5)

C (500, −500) (20, −20) (−25, 25)

In the following exercise, we will try to determine what each player should do.

 Exercise 1.2.3 : More Practice Finding Strategies


a. Just by quickly looking at the matrix, which player appears to be able to win more than the other player? Does one player
seem to have an advantage? Explain.
b. Determine what each player should do. Explain your answer.

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c. Compare your answer in (b) to your answer in (a). Did the player you suggested in (a) actually win more than the other
player?
d. According to your answer in (b), does Player 1 end up with the largest possible payoff (for Player 1) in the matrix?
e. According to your answer in (b), does Player 2 end up with the largest possible payoff (for Player 2) in the matrix?
f. Do you still think a player has an advantage in this game? Is it the same answer as in (a)?

This chapter has introduced you to who the players are and how to organize strategies and payoffs into a matrix. In the next chapter
we will study some methods for how a player can determine his or her best strategy.

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available upon request.

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CHAPTER OVERVIEW

2: Two-Person Zero-Sum Games


In this chapter, we will look at a specific type of two-player game. These are often the first games studied in game theory as they
can be straightforward to analyze. All of our games in this chapter will have only two players. We will also focus on games in
which one player's win is the other player's loss.
2.1: Introduction to Two-Person Zero-Sum Games
2.2: Dominated Strategies
2.3: Probability and Expected Value
2.4: A Game of Chance
2.5: Equilibrium Points
2.6: Strategies for Zero-Sum Games and Equilibrium Points
2.7: Popular Culture: Rationality and Perfect Information

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upon request.

1
2.1: Introduction to Two-Person Zero-Sum Games
In all of the examples from the last section, whatever one player won, the other player lost.

 Definition: Zero-Sum (Constant-Sum)


A two-player game is called a zero-sum game if the sum of the payoffs to each player is constant for all possible outcomes of
the game. More specifically, the terms (or coordinates) in each payoff vector must add up to the same value for each payoff
vector. Such games are sometimes called constant-sum games instead.

We can always think of zero-sum games as being games in which one player's win is the other player's loss.

 Example 2.1.1 : Zero-sum in Poker


Consider a poker game in which each player comes to the game with $100. If there are five players, then the sum of money for
all five players is always $500. At any given time during the game, a particular player may have more than $100, but then
another player must have less than $100. One player's win is another player's loss.

 Example 2.1.2 : Zero-sum in Cake Division


Consider the cake division game. Determine the payoff matrix for this game. It is important to determine what each player's
options are first: how can the “cutter” cut the cake? How can the “chooser” pick her piece? The payoff matrix is given in Table
2.1.1.

Table 2.1.1: Payoff Matrix for Cake Cutting Game

Chooser

Larger Piece Smaller Piece

Cut Evenly (half, half) (half, half)


Cutter
Cut Unevenly (small piece, large piece) (large piece, small piece)

In order to better see that this game is zero-sum (or constant-sum), we could give values for the amount of cake each player
gets. For example, half the cake would be 50%, a small piece might be 40%. Then we can rewrite the matrix with the
percentage values in Table 2.1.2.

Table 2.1.2: Payoff Matrix, in Percent of Cake, for Cake Cutting Game.

Chooser

Larger Piece Smaller Piece

Cut Evenly (50, 50) (50, 50)


Cutter
Cut Uenvenly (40, 60) (60, 40)

In each outcome, the payoffs to each player add up to 100 (or 100%). In more mathematical terms, the coordinates of each
payoff vector add up to 100. Thus the sum is the same, or constant, for each outcome.

It is probably simple to see from the matrix in Table 2.1.2 that Player 2 will always choose the large piece, thus Player 1 does best
to cut the cake evenly. The outcome of the game is the strategy pair denoted [Cut Evenly, Larger Piece], with resulting payoff
vector (50, 50).
But why are we going to call these games “zero-sum” rather than “constant-sum”? We can convert any zero-sum game to a game
where the payoffs actually sum to zero.

 Example 2.1.3 : Poker Payoffs Revisited

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Consider the above poker game where each player begins the game with $100. Suppose at some point in the game the five
players have the following amounts of money: $50, $200, $140, $100, $10. Then we could think of their gain as −$50, $100,
$40, $0, −$90. What do these five numbers add up to?

 Example 2.1.4

Convert the cake division payoffs so that the payoff vectors sum to zero (rather than 100).
The solution is given in Table 2.1.3.

Table 2.1.3: Zero-sum Payoff Matrix for Cake Cutting Game.

Chooser

Larger Piece Smaller Piece

Cut Evenly (0, 0) (0, 0)


Cutter
Cut Unvenly (−10, 10) (10, −10)

But let's make sure we understand what these numbers mean. For example, a payoff of (0, 0) does not mean each player gets
no cake, it means they don't get any more cake than the other player. In this example, each player gets half the cake (50%) plus
the payoff.

In the form of Example 2.1.4, it is easy to recognize a zero-sum game since each payoff vector has the form (a, −a) (or (−a, a) ).

2.1.1: Example—An Election Campaign Game


Two candidates, Arnold and Bainbridge, are facing each other in a state election. They have three choices regarding the issue of the
speed limit on I-5: They can support raising the speed limit to 70 MPH, they can support keeping the current speed limit, or they
can dodge the issue entirely. The next three examples present three different payoff matrices for Arnold and Bainbridge.

 Example 2.1.5 : The Speed Limit Issue


The candidates have the information given in Table 2.1.4 about how they would likely fare in the election based on how they
stand on the speed limit.

Table 2.1.4: Percentage of the Vote for Example 2.1.5.

Bainbridge

Raise Limit Keep Limit Dodge

Raise Limit (45, 55) (50, 50) (40, 60)

Arnold Keep Limit (60, 40) (55, 45) (50, 50)

Dodge (45, 55) (55, 45) (40, 60)

 Exercise 2.1.1 : Analysis of Election Game


For the following questions, assume Arnold and Bainbridge have the payoff matrix given in Example 2.1.5.
a. Explain why Example 2.1.5 is a zero-sum game.
b. What should Arnold choose to do? What should Bainbridge choose to do? Be sure to explain each candidate's choice. And
remember, a player doesn't just want to win, he wants to get THE MOST votes– for example, you could assume these are
polling numbers and that there is some margin of error, thus a candidate prefers to have a larger margin over his opponent!
c. What is the outcome of the election?
d. Does Arnold need to consider Bainbridge's strategies is in order to decide on his own strategy? Does Bainbridge need to
consider Arnold's strategies is in order to decide on his own strategy? Explain your answer.

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 Example 2.1.6 : A New Scenario

Bainbridge's mother is injured in a highway accident caused by speeding. The new payoff matrix is given in Table 2.1.6.

Table 2.1.5: Percentage of the Vote for Example 2.1.6.

Bainbridge

Raise Limit Keep Limit Dodge

Raise Limit (45, 55) (10, 90) (40, 60)

Arnold Keep Limit (60, 40) (55, 45) (50, 50)

Dodge (45, 55) (10, 90) (40, 60)

 Exercise 2.1.2 : Analysis of the Second Scenario

For the following questions, assume Arnold and Bainbridge have the payoff matrix given in Example 2.1.6.
a. Explain why Example 2.1.6 is a zero-sum game.
b. What should Arnold choose to do? What should Bainbridge choose to do? Be sure to explain each candidate's choice.
c. What is the outcome of the election?
d. Does Arnold need to consider Bainbridge's strategies is in order to decide on his own strategy? Does Bainbridge need to
consider Arnold's strategies is in order to decide on his own strategy? Explain your answer.

 Example 2.1.7 : A Third Scenario

Bainbridge begins giving election speeches at college campuses and monster truck rallies. The new payoff matrix is given in
Table 2.1.6.

Table 2.1.6: Percentage of the Vote for Example 2.1.7.

Bainbridge

Raise Limit Keep Limit Dodge

Raise Limit (35, 65) (10, 90) (60, 40)

Arnold Keep Limit (45, 55) (55, 45) (50, 50)

Dodge (40, 60) (10, 90) (65, 35)

 Exercise 2.1.3 : Analysis of the Third Scenario

For the following questions, assume Arnold and Bainbridge have the payoff matrix given in Example 2.1.7.
a. Explain why Example 2.1.7 is a zero-sum game.
b. What should Arnold choose to do? What should Bainbridge choose to do? Be sure to explain each candidate's choice.
c. What is the outcome of the election?
d. Does Arnold need to consider Bainbridge's strategies is in order to decide on his own strategy? Does Bainbridge need to
consider Arnold's strategies is in order to decide on his own strategy? Explain your answer.

 Exercise 2.1.4 : Changing the Strategy

In each of the above scenarios, is there any reason for Arnold or Bainbridge to change his strategy? If there is, explain under
what circumstances it makes sense to change strategy. If not, explain why it never makes sense to change strategy.

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2.1.2: Equilibrium Pairs
Chances are, in each of the exercises above, you were able to determine what each player should do. In particular, if both players
play your suggested strategies, there is no reason for either player to change to a different strategy.

 Definition: Equilibrium Pair


A pair of strategies is an equilibrium pair if neither player gains by changing strategies.

For example, consider the game matrix from Example 1.2.1, Table 1.2.3.

Table 2.1.7: Payoff Matrix for Example 1.2.1

Player 2

X Y

A (100, −100) (−10, 10)


Player 1
B (0, 0) (−1, 11)

You determined that Player 2 should choose to play Y, and thus, Player 1 should play B (i.e., we have the strategy pair [B, Y]).
Why is this an equilibrium pair? If Player 2 plays Y, does Player 1 have any reason to change to strategy A? No, she would lose 10
instead of 1! If Player 1 plays B, does Player 2 have any reason to change to strategy X? No, she would gain 0 instead of 1! Thus
neither player benefits from changing strategy, and so we say [B, Y] is an equilibrium pair.
For now, we can use a “guess and check” method for finding equilibrium pairs. Take each outcome and decide whether either
player would prefer to switch. Remember, Player 1 can only choose a different row, and Player 2 can only choose a different
column. In our above example there are four outcomes to check: [A, X], [A, Y], [B, X], and [B, Y]. We already know [B, Y] is an
equilibrium pair, but let's check the rest. Suppose the players play [A, X]. Does Player 1 want to switch to B? No, she'd rather get
100 than 0 . Does player 2 want to switch to Y? Yes! She'd rather get 10 than −100. So [A, X] is NOT an equilibrium pair since a

player wants to switch. Now check that for [A, Y] Player 1 would want to switch, and for [B, X] both players would want to
switch. Thus [A, Y] and [B, X] are NOT equilibrium pairs. Now you can try to find equilibrium pairs in any matrix game by just
checking each payoff vector to see if one of the players would have wanted to switch to a different strategy.

 Exercise 2.1.5 : Checking Equilibrium Pairs

Are the strategy pairs you determined in the three election scenarios equilibrium pairs? In other words, would either player
prefer to change strategies? (You don't need to check whether any other strategies are equilibrium pairs.)

 Exercise 2.1.6 : Using "Guess and Check}

Use the “guess and check” method to determine any equilibrium pairs for the following payoff matrices.
(2, −2) (2, −2)
a. [ ]
(1, −1) (3, −3)

(3, −3) (1, −1)


[ ]
(2, −2) (4, −4)

(4, −4) (5, −5)


[ ]
(4, −4) (3, −3)

After trying the above examples, do you think every game has an equilibrium pair? Can games have multiple equilibrium pairs?

 Exercise 2.1.7 : Existence of Equilibrium Pairs

Do all games have equilibrium pairs?

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 Exercise 2.1.8 : Multiple Equilibrium Pairs

Can a game have more than one equilibrium pair?

The last three exercises give you a few more games to practice with.

 Exercise 2.1.9 : Rock, Paper, Scissors

Consider the game ROCK, PAPER, SCISSORS (Rock beats Scissors, Scissors beat Paper, Paper beats Rock). Construct the
payoff matrix for this game. Does it have an equilibrium pair? Explain your answer.

 Exercise 2.1.10 : Battle of the Networks

Two television networks are battling for viewers for 7 pm Monday night. They each need to decide if they are going to show a
sitcom or a sporting event. Table 2.1.8 gives the payoffs as percent of viewers.

Table 2.1.8: Payoff matrix for Battle of the Networks

Network 2

Sitcom Sports

Sitcom (55, 45) (52, 48)


Network 1
Sports (50, 50) (45, 55)

a. Explain why this is a zero-sum game.


b. Does this game have an equilibrium pair? If so, find it and explain what each network should do.
c. Convert this game to one in which the payoffs actually sum to zero. Hint: if a network wins 60% of the viewers, how much
more than 50% of the viewers does it have?

 Exercise 2.1.11 : Competitive Advantage

This game is an example of what economists call Competitive Advantage. Two competing firms need to decide whether or
not to adopt a new type of technology. The payoff matrix is in Table 2.1.9. The variable a is a positive number representing the
economic advantage a firm will gain if it is the first to adopt the new technology.

Table 2.1.9: Payoff matrix for Competitve Advantage

Firm B

Adopt New Tech Stay Put

Adopt New Tech (0, 0) (a, −a)


Firm A
Stay Put (−a, a) (0, 0)

1. Explain the payoff vector for each strategy pair. For example, why should the pair [Adopt New Tech, Stay Put] have the
payoff (a, −a)?
2. Explain what each firm should do.
3. Give a real life example of Competitive Advantage.

We've seen how to describe a zero-sum game and how to find equilibrium pairs. We've tried to decide what each player's strategy
should be. Each player may need to consider the strategy of the other player in order to determine his or her best strategy. But we
need to be careful, although our intuition can be useful in deciding the best strategy, we'd like to be able to be more precise about
finding strategies for each player. We'll learn some of these tools in the next section.

This page titled 2.1: Introduction to Two-Person Zero-Sum Games is shared under a CC BY-SA 4.0 license and was authored, remixed, and/or
curated by Jennifer A. Firkins Nordstrom via source content that was edited to the style and standards of the LibreTexts platform; a detailed edit

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history is available upon request.

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2.2: Dominated Strategies
Recall that in a zero-sum game, we know that one player's win is the other player's loss. Furthermore, we know we can rewrite any
zero-sum game so that the player's payoffs are in the form (a, −a). Note, this works even if a is negative; in which case, −a is
positive.

 Example 2.2.1 : A Simpler Payoff Matrix


Consider the zero-sum game with payoff matrix in Table 2.2.1. Note that for simplicity our payoff matrix contains only the
payoffs and not the strategy names; but Player 1 still chooses a row and Player 2 still chooses a column.

Table 2.2.1: The Payoff Matrix for Example 2.2.1

Player 2

(1, −1) (−0, 0)


Player 1
(−1, 1) (−2, 2)

If we know we are playing a zero-sum game, then the use of ordered pairs seems somewhat redundant: If Player 1 wins 1, then
we know that Player 2 must lose 1 (win −1). Thus, if we KNOW we are playing a zero-sum game, we can simplify our
notation by just using Player 1's payoffs. The above matrix in Table 2.2.2 can be simplified as in Table 2.2.2.

Table 2.2.2: The Payoff Matrix for Example 2.2.1 using Only Player 1's Payoffs.

Player 2

1 0
Player 1
−1 −2

When simplifying, keep a few things in mind:


1. You MUST know that the game is zero-sum.
2. If it is not otherwise specified, the payoffs represent Player 1's payoffs.
3. You can always give a similar matrix representing Player 2's payoffs. However, due to (2), you should indicate that the matrix is
for Player 2. For example, Player 2's payoff matrix would be given by Table 2.2.3.
Table 2.2.3: The Payoff Matrix for Example 2.2.1 using Only Player 2's Payoffs.

Player 2

−1 0
Player 1
1 2

4. Both players can make strategy decisions by considering only Player 1's payoff matrix. (Why?) Just to test this out, by looking
only at the matrix in Table 2.2.3 determine which strategy each player should choose.

Table 2.2.4: Player 1's Payoffs in Example 2.2.1.

Player 2

1 0
Player 1
−1 −2

In this last example, it should be clear that Player 1 is looking for rows which give her the largest payoff. This is nothing new.
However, Player 2 is now looking for columns which give Player 1 the SMALLEST payoff. (Why?)
Now that we have simplified our notation for zero-sum games, let's try to find a way to determine the best strategy for each player.

 Example 2.2.2 : A Game

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Consider the zero-sum game given in Table 2.2.5.

Table 2.2.5: Payoff Matrix for Example 2.2.2.

Player 2

1 0 2
Player 1
−1 −2 2

Determine which row Player 1 should choose. Is there any situation in which Player 1 would choose the other row?

 Example 2.2.3 : Another Game

Consider the zero-sum game given in Table 2.2.6.

Table 2.2.6: Payoff Matrix for Example 2.2.3.

Player 2

1 0 2
Player 1
−1 −2 3

Determine which row Player 1 should choose. Is there any situation in which Player 1 would choose the other row?

In Example 2.2.2, no matter what Player 2 does, Player 1 would always choose Row 1, since every payoff in Row 1 is greater than
or equal to the corresponding payoff in Row 2 (1 ≥ −1, 0 ≥ −2, 2 ≥ 2 ). In Example 2.2.3, this is not the case: if Player 2 were to
choose Column 3, then Player 1 would prefer Row 2. In Example 2.2.2 we would say that Row 1 dominates Row 2.

 Definition: Dominate

A strategy X dominates a strategy Y if every entry for X is greater than or equal to the corresponding entry for Y . In this
case, we say Y is dominated by X.
If strategy X dominates strategy Y , we can write X ≻ Y .

In mathematical notation, let a be the value in the


ik i
th
row and k column. Similarly, a is the value in the
th
jk j
th
row and k
th

column. The i row dominates the j row if a ≥ a


th th
ik jk for all k, and a > a for at least one k.
ik jk

This definition can also be used for Player 2: we consider columns instead of rows. If we are looking at Player 1's payoffs, then
Player 2 prefers smaller payoffs. Thus one column X dominates another column Y if all the entries in X are smaller than or equal
to the corresponding entries in Y .
Here is the great thing: we can always eliminate dominated strategies! (Why?) Thus, in Example 2.2.2, we can eliminate Row 2, as
in Figure 2.2.1.

Figure 2.2.1 : Row 2 is dominated by Row 1. (Copyright; author via source)


Now it is easy to see what Player 2 should do.
In Example 2.2.3, we cannot eliminate Row 2 since it is not dominated by Row 1. However, it should be clear that Column 2
dominates Column 3 (remember, Player 2 prefers SMALLER values). Thus we can eliminate Column 3 as in Figure 2.2.2.

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Figure 2.2.2 : Column 3 is dominated by Column 2. (Copyright; author via source)
AFTER eliminating Column 3, Row 1 dominates Row 2. Now, in Figure 2.2.3 we can eliminate Row 2.

Figure 2.2.3 : After eliminating Column 3, Row 2 is dominated by Row 1. (Copyright; author via source)
Again, now it is easy to determine what each player should do.

 Exercise 2.2.1 : Check Equilibrium Pairs

Check that the strategy pairs we determined in Example 2.2.2 and Example 2.2.3 are, in fact, equilibrium pairs.

Now, look back at the election examples from Section 2.1.1 and apply the process of eliminating dominated strategies.

 Exercise 2.2.2 : Eliminating Dominated Strategies

Use the idea of eliminating dominated strategies to determine what each player should do in the Arnold/Bainbridge examples
in Table 2.1.4, Table 2.1.5, and Table 2.1.6. Do you get the same strategy pairs as you determined in the related exercises
(Exercise 2.1.1, Exercise 2.1.2, Exercise 2.1.3)?

The next three exercises provide more practice in using dominated strategies to find equilibrium pairs.

 Exercise 2.2.3 : More Practice with Dominated Strategies.

Use the idea of eliminating dominated strategies to determine any equilibrium pairs in the zero-sum game given in Table 2.2.7.
Note, since it is a zero-sum game we need only show Player 1's payoffs. Explain all the steps in your solution. If you are
unable to find an equilibrium pair, explain what goes wrong.

Table 2.2.7: Payoff Matrix for Exercise 2.2.3.

Player 2

W X Y Z

A 1 0 0 10

Player 1 B −1 0 −2 9

C 1 1 1 8

D −2 0 0 7

 Exercise 2.2.4 : Determine Equilibrium Pairs


Determine any equilibrium pairs in the zero-sum game given in Table 2.2.8 . Explain all the steps in your solution. If you are
unable to find an equilibrium pair, explain what goes wrong.

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Table 2.2.8: Payoff Matrix for Exercise 2.2.4.

Player 2

W X Y Z

A 1 2 3 4

Player 1 B 0 −1 −0 5

C −1 3 2 4

D 0 1 −1 1

 Exercise 2.2.5 : Practice Finding Equilibrium Pairs

Determine any equilibrium pairs in the zero-sum game given in Table 2.2.9 . Explain all the steps in your solution. If you are
unable to find an equilibrium pair, explain what goes wrong.

Table 2.2.9: Payoff Matrix for Exercise 2.2.5.

Player 2

W X Y Z

A −2 0 3 20

Player 1 B 1 −2 −3 0

C 10 −10 −1 1

D 0 0 10 15

 Exercise 2.2.6 : A More Challenging Example


Determine any equilibrium pairs in the zero-sum game given in Table 2.2.10. Explain all the steps in your solution. If you are
unable to find an equilibrium pair, explain what goes wrong.

Table 2.2.10: Payoff Matrix for Exercise 2.2.6.

Player 2

W X Y Z

A −2 0 3 20

Player 1 B 1 −2 −5 −3

C 10 −10 −1 1

D 0 0 10 8

Chances are you had trouble determining an equilibrium pair for the game in Exercise 2.2.10. Does this mean there isn't an
equilibrium pair? Not necessarily, but we are stuck if we try to use only the idea of eliminating dominated strategies. So we need a
new method.
We might think of our next method as the “worst case scenario,” or “extremely defensive play.” The idea is that we want to assume
our opponent is the best player to ever live. In fact, we might assume our opponent is telepathic. So no matter what we do, our
opponent will always guess what we are going to choose.

 Example 2.2.4 : Playing Against the Best


Assume you are Player 1, and you are playing against this “infinitely smart” Player 2. Consider the game in Table 2.2.7. If you
pick row A, what will Player 2 do? Player 2 will pick column X or Y. Try this for each of the rows. Which row is your best

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choice? If you pick A, you will get 0; if you pick B, you will get −2; if you pick C, you will get 1; and if you pick D you will
get −2. Thus, your best choice is to choose C and get 1. Now assume you are Player 2, and Player 1 is “infinitely smart.”
Which column is your best choice? If you pick W, Player 1 will get 1 (you will get −1); if you pick X, Player 1 will get 1; if
you pick Y, Player 1 will get 1; and if you pick Z, you will get 10. Thus, you can choose W, X, or Y (since you want Player 1
to win the least) and get −1.

 Exercise 2.2.7 : A New Method

Using the method described in Example 2.2.4, determine what each player should do in the game in Table 2.2.8.

 Exercise 2.2.8 : More Practice With the New Method

Using the method described in Example 2.2.4, determine what each player should do in the game in Table 2.2.9.

After working through a few examples can you describe more generally the process used in Example 2.2.4? What is Player 1
looking for in each row? Then how does she choose which row to play? What is Player 2 looking for in each column? How does he
choose which column to play?

 Exercise 2.2.9 : Generalizing the New Method

Generalize the method described in Example 2.2.4. In other words, give a general rule for how Player 1 should determine his
or her best move. Do the same for Player 2.

 Exercise 2.2.10 : The New Method and Equilibrium Points

What do you notice about using this method on the games in Tables 2.2.7 , Table , and Table
2.2.8 2.2.9 ? Is the solution an
equilibrium pair?

 Exercise 2.2.11 : The New Method on the Challenging Example

Now try this method on the elusive payoff matrix in Table 2.2.10 . What should each player do? Do you think we get an
equilibrium pair? Explain.

The strategies we found using the above method have a more official name. Player 1's strategy is called the maximin strategy.
Player 1 is maximizing the minimum values from each row. Player 2's strategy is called the minimax strategy. Player 2 is
minimizing the maximum values from each column. Notice, we can find the maximin and minimax strategies for any zero-sum
game. But do our players always want to use these strategies? Will they always result in an equilibrium pair? The next five
exercises explore these questions.

 Exercise 2.2.12 : Look for Dominated Strategies

Let's consider another game matrix, given in Table 2.2.11. Explain why you cannot use dominated strategies to find an
equilibrium pair. Do you think there is an equilibrium pair for this game (why or why not)?

Table 2.2.11: Payoff Matrix for Exercise 2.2.12.

Player 2

W X Y Z

A −2 0 3 20

Player 1 B 1 2 −3 0

C 10 −10 −1 1

D 0 0 10 15

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 Exercise 2.2.13 : Find the Maximin/Minimax Strategy

If both players use the maximin/minimax strategy, what is the outcome of the game in Table 2.2.11?

 Exercise 2.2.14 : Predicting a Maximin Strategy

In the game in Table 2.2.11, if Player 1's opponent can guess that Player 1 will choose to use a maximin strategy, is Player 1
better off not using the maximin strategy?

 Exercise 2.2.15 : Deviating From the Maximin/Minimax Strategy

Suppose both players initially decide to use the minimax/maximin strategy in the game in Table 2.2.11. Is Player 1 better off
choosing a different strategy? If Player 2 guesses a change, is Player 2 better off changing strategies? Continue this line of
reasoning for several iterations. What strategies do each of the players choose? Is at least one player always better off
switching strategies? Can we conclude that the maximin/ minimax strategy does not lead to an equilibrium pair?

 Exercise 2.2.16 : Comparing Examples

Compare your answers in Exercise 2.2.15 to what happens in Exercise 2.2.3, Exercise 2.2.4, and Exercise 2.2.5. Can you
identify any key differences between the games in Exercise 2.2.15 and Exercise 2.2.3, Exercise 2.2.4, and Exercise 2.2.5.

Given a zero-sum matrix game, we can find equilibrium pairs (if they exist) by the “guess and check” method, by eliminating
dominated strategies, and by looking for the minimax/maximin strategies. You should be able to apply all three methods and think
about which method might be the most appropriate for a given matrix game. For example, although “guess and check” should
always find an equilibrium point if it exists, it may be very tedious to apply to a really large matrix. The maximin/minimax method
might be much faster.

This page titled 2.2: Dominated Strategies is shared under a CC BY-SA 4.0 license and was authored, remixed, and/or curated by Jennifer A.
Firkins Nordstrom via source content that was edited to the style and standards of the LibreTexts platform; a detailed edit history is available upon
request.

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2.3: Probability and Expected Value
Many games have an element of chance. In order to model such games and determine strategies, we should understand how
mathematicians use probability to represent chance.

2.3.1: Some Basic Probability


You are probably a little bit familiar with the idea of probability. People often talk about the chance of some event happening. For
example, a weather forecast might say there is a 20% chance of rain. Now determining the chance of rain can be difficult, so we
will stick with some easier examples.
Consider a standard deck of 52 playing cards. What is the chance of drawing a red card? What is the probability of drawing a red
card? Is there a difference between chance and probability? Yes! The probability of an event has a very specific meaning in
mathematics.
The probability of an event E is the number of different outcomes resulting in E divided by the total number of equally likely
outcomes. In mathematical symbols,
number of different outcomes resulting in E
P (E) = .
total number of equally likely outcomes

Notice that the probability of E will always be a number between 0 and 1. An impossible event will have probability 0; an event
that always occurs will have probability 1.
1
Thus, the probability of drawing a red card is , not . Although we can convert between probability and percent (since
50% 0.5
2
converted to percent is 50%), it is important to answer a question about probability with a probability, not a percent.

 Example 2.3.1 : Drawing a Particular Suit


Given a standard deck of playing cards, what is the probability of drawing a heart?
Solution
1
You might say since there are four suits, and one of the suits is hearts, you have a probability of . You'd be correct, but be
4
careful with this reasoning. This works because each suit has the same number of cards, so each suit is equally likely. Another
way the calculate the probability is to count the number of hearts (13) divided by the number of cards (52). Thus, we get a
13 1
probability of = = 0.25.
52 4

 Example 2.3.2 : A Card is Missing


Now suppose the ace of spades is missing from the deck. What is the probability of drawing a heart?
Solution
1
As before, there are still four suits in the deck, so it might be tempting to say the probability is still . But we'd be wrong!
4
Each suit is no longer equally likely since, it is slightly less likely that we draw a spade. Each individual card is still equally
likely, though. So now
number of hearts 13
P (drawing a heart) = = = 0.255.
number of cards 51

As you can see, it is now slightly more likely that we draw a heart if the ace of spades is removed from the deck.

Now try to compute some probabilities on your own.

 Exercise 2.3.1 : Probability with a Single Die

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Consider rolling a single die. List the possible outcomes. Assuming that it is a fair die, are all the outcomes equally likely?
What is the probability of rolling a 2? What is the probability of rolling an even number?

 Exercise 2.3.2 : Probability with Red and Green Die


Now consider rolling two fair dice, say a red die and a green die.
a. How many equally likely outcomes are there? List them.
b. What is the probability that you get a two on the red die and a four on the green die?
c. What is the probability that you roll a three on the red die?
d. What is the probability that you roll a two and a four?
e. What is the probability that you roll a three?
f. Compare your answers in (b) and (c) with your answers in (d) and (e). Are they the same or different? Explain.

 Exercise 2.3.3 : Probability with Two of the Same Dice

Again consider rolling two fair dice, but now we don't care what color they are.
a. Does this change the number of equally likely outcomes from Exercise 2.3.2? Why or why not? It may be helpful to list the
possible outcomes.
b. What is the probability that you get snake eyes (two ones)?
c. What is the probability that you roll a two and a four?
d. What is the probability that you roll a three?
e. What is the probability that you roll a two OR a four?

 Exercise 2.3.4 : Sums of Dice.

Suppose we roll two dice and add them.


a. List the possible sums.
b. What is the probability that you get a total of seven on the two dice?
c. What is the probability that you get a total of four when you roll two dice?
d. Are the events of getting a total of seven and getting a total of four equally likely? Explain.

It is important to note that just because you can list all of the possible outcomes, they may not be equally likely. As we see from
1
Exercise 2.3.4, although there are 11 possible sums, the probability of getting any particular sum (such as seven) is not .
11

2.3.2: Expected Value

 Definition: Expected Value

The expected value of a game of chance is the average net gain or loss that we would expect per game if we played the game
many times. We compute the expected value by multiplying the value of each outcome by its probability of occurring and then
add up all of the products.

For example, suppose you toss a fair coin: Heads, you win 25 cents, Tails, you lose 25 cents. The probability of getting Heads is
1
, as is the probability of getting Tails. The expected value of the game is
2

1 1
( × .25) + ( × (−.25)) = 0.
2 2

Thus, you would expect an average payoff of $0, if you were to play the game several times. Note, the expected value is not
necessarily the actual value of playing the game.

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 Exercise 2.3.5 : Expected Value and a Two-Coin Game

Consider a game where you toss two coins. If you get two Heads, you win $2. If you get a Head and a Tail, you win $1, if you
get two Tails, you lose $4. Find the expected value of the game. (Caution: first you need to find the probability of each event–
think about “equally likely” events.)

 Exercise 2.3.6 : Play the Two-Coin Game

Now play the game in Exercise 2.3.5 the indicated number of times. Give your actual payoff and compare it to the expected
value.
a. One time.
b. Ten times.
c. Twenty-five times.
d. Is there a single possible outcome where you would actually win or lose the exact amount computed for the expected
value? If not, why do we call it the expected value?

 Exercise 2.3.7 : Expected Value of Roulette

A standard roulette wheel has 38 numbered slots for a small ball to land in: 36 are marked from 1 to 36, with half of those
black and half red; two green slots are numbered 0 and 00. An allowable bet is to bet on either red of black. This bet is an even
money bet, which means if you win you receive twice what you bet. Many people think that betting black or red is a fair game.
What is the expected value of betting $1000 on red? Is this a fair game? Explain.

 Exercise 2.3.8 : Another Roulette Example

Considering again the roulette wheel, if you bet $100 on a particular number and the ball lands on that number, you win
$3600. What is the expected value of betting $100 on Red 4 ?

After finding the expected value of the games in the above exercises, what do you think the expected value can tell us about a
game? Can you use it to decide whether you should play that game of chance or not? When will a game be advantageous for the
player? We often care whether a game is “fair.” Can the expected value help you determine if a game is fair?

 Exercise 2.3.9 : Expected Value and Fairness

Use the idea of expected value to explain “fairness” in a game of chance.

The last exercise is a good challenge for exploring expected value.

 Exercise 2.3.10 : A Betting Game with Two Dice

You place a bet and roll two fair dice. If you roll a 7 or an 11, you receive your bet back (you break even). If you roll a 2, a 3,
or a 12, then you lose your bet. If you roll anything else, you receive half of the sum you rolled in dollars. How much should
you bet to make this a fair game?

Hint
It might be helpful to begin with a table showing the possible sums, their probability, and the payoff for each.

In the next section, we use the ideas of probability and expected value to understand how to set up a payoff matrix for a game of
chance.

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2.4: A Game of Chance
Now that we have worked with expected value, we can begin to analyze some simple games that involve an element of chance.

 Example 2.4.1 : One-Card Stud Poker


We begin with a deck of cards in which 50% are Aces (you can use Red cards for Aces) and 50% are Kings (you can use
Black cards for Kings). There are two players and one dealer. The play begins by each player putting in the ante (1 chip). Each
player is dealt one card face down. WITHOUT LOOKING AT HIS OR HER CARD, the players decide to Bet (say, chip) or
Fold. Players secretly show the dealer their choice. If one player bet and the other folded, then the player who bet wins. If both
bet or both fold, then Ace beats King (or Red beats Black); winner takes the pot (all the chips from the ante and any bets). If
there is a tie, they split the pot.

 Exercise 2.4.1 : Play One-Card Stud Poker


Play the game several times with two other people (so you have two players and a dealer), keeping track of the strategy choices
of the players and the resulting payoffs.

 Exercise 2.4.2 : Guess a Strategy


Based on playing the game, determine a possible winning strategy.

 Exercise 2.4.3 : Check if Zero-Sum


Is this a zero-sum game? Why or why not?

 Exercise 2.4.4 : Relationship Between the Deal and the Strategy


Does the actual deal affect the choice of strategy?

 Exercise 2.4.5 : Strategy Choices


On any given deal, what strategy choices does a player have?

Before moving on, you should attempt to determine the payoff matrix. The remainder of this section will be more meaningful if
you have given some thought to what the payoff matrix should be. It is OK to be wrong at this point, it is not OK to not try.

 Exercise 2.4.6 : Determine a Possible Payoff Matrix

Write down a possible payoff matrix for this game.

Now let's work through creating the payoff matrix for One-Card Stud Poker.

 Exercise 2.4.7 : Payoff for [Bet, Fold]

If Player 1 Bets and Player 2 Folds, does it matter which cards were dealt? How much does Player 1 win? How much does
Player 2 lose? What is the payoff vector for [Bet, Fold]? (Keep in mind your answer to Exercise 2.4.3.)

 Exercise 2.4.8 : Payoff for [Fold, Bet]

If Player 1 Folds and Player 2 Bets, does it matter which cards were dealt? What is the payoff vector for [Fold, Bet]?

 Exercise 2.4.9 : Payoff and the Actual Deal

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If both players Bet, does the payoff depend on which cards were dealt?

To determine the payoff vector for [Bet, Bet] and [Fold, Fold] we will need to consider which cards were dealt. We can use some
probability to determine the remaining payoff vectors.

 Exercise 2.4.10 : Probability of Each Deal

There are four possible outcomes of the deal– list them. What is the probability that each occurs? (Remember: the probability
of an event is a number between 0 and 1.)

 Exercise 2.4.11 : Payoff for Each Deal with [Bet, Bet]

Consider the pair of strategies [Bet, Bet]. For each possible deal, determine the payoff vector. For example, if the players are
each dealt an Ace (Red), how much does each player win? (Again, keep in mind your answer to Exercise 2.4.3.)

In order to calculate the payoff for [Bet, Bet], we need to take a weighted average of the possible payoff vectors in Exercise 2.4.11.
In particular, we will “weight” a payoff by the probability that it occurs. Recall that this is the expected value. We will calculate the
expected value separately for each player.

 Exercise 2.4.12 : Player 1's expected value for [Bet, Bet].

Find the expected value for [Bet, Bet] for Player 1.

 Exercise 2.4.13 : Player 2's expected value for [Bet, Bet].

Find the expected value for [Bet, Bet] for Player 2.

The pair of expected values from Exercise 2.4.12 and Exercise 2.4.13 is the payoff vector for [Bet, Bet].

 Exercise 2.4.14 : Justify Using Expected Value as the Payoff

Explain why it should make sense to use the expected values for the payoffs in the matrix for the strategy pair [Bet, Bet].

Hint
Think about what a player needs to know to choose a strategy in a game of chance.

We can use a similar process to find the payoff vector for [Fold, Fold].

 Exercise 2.4.15 : Repeat for [Fold, Fold].

Repeat Exercise 2.4.11, Exercise 2.4.12, and Exercise 2.4.13 for the pair of strategies [Fold, Fold].

 Exercise 2.4.16 : Complete Payoff Matrix

Summarize the above work by giving the completed payoff matrix for One-Card Stud Poker.

Now that you have done all the hard work of finding the payoff matrix for One-Card Stud Poker, we can analyze our two-player
zero-sum game using the techniques we learned in the previous sections. It is also important to see how the mathematical solution
compares to our conjectured solution from Exercise 2.4.2.

 Exercise 2.4.17 : Best Strategy for One-Card Stud

Use the payoff matrix to determine the best strategy for each player. If each player uses their best strategy, what will be the
outcome of the game?

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 Exercise 2.4.18 : Compare Strategies

Compare the strategy you found in Exercise 2.4.17 to your suggested strategy in Exercise 2.4.2. In particular, discuss how
knowing the payoff matrix might have changed your strategy. Also compare the payoff that results from the strategy in
Exercise 2.4.17 to the payoff that results from your original strategy in Exercise 2.4.2.

Since One-Card Stud Poker has an element of chance, we should see what happens if we play the game several times using the
strategy from Exercise 2.4.17.

 Exercise 2.4.19 : Payoff for Repeated One-Card Stud

Use the payoff matrix to predict what the payoff to each player would be if the game is played ten times.

 Exercise 2.4.20 : Play Repeated One-Card Stud

Play the game ten times using the best strategy. How much has each player won or lost after ten hands of One-Card Stud
Poker? Compare your answer to your prediction in Exercise 2.4.19. Does the actual payoff differ from the theoretical payoff?
If so, why do you think this might be?

 Exercise 2.4.21 : Fair Game

Explain why this game is considered fair.

 Example 2.4.2 : Generalized One-Card Stud Poker

In One-Card Stud Poker we anted one chip and bet one chip. Now, suppose we let players ante a different amount and bet a
different amount (although players will still ante and bet the same amount as each other). Suppose a player antes a and bets b.
How might this change the game?

 Exercise 2.4.22 : Payoff Matrix for Generalized One-Card Stud

Use the method outlined for One-Card Stud Poker to determine the payoff matrix for Generalized One-Card Stud Poker.

 Exercise 2.4.23 : Strategy for Generalized One-Card Stud

Does the strategy change for the generalized version of the game? Explain.

Now that we have analyzed several zero-sum games, we can see how important is to find any equilibrium pairs. In the next section,
we explore equilibrium strategies in more detail.

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2.5: Equilibrium Points
In this section, we will try to gain a greater understanding of equilibrium strategies in a game. In general, we call the pair of
equilibrium strategies an equilibrium pair, while we call the specific payoff vector associated with an equilibrium pair an
equilibrium point.

 Exercise 2.5.1 : Find Equilibrium Points


Determine the equilibrium point(s) for the following games.
(2, −2) (1, −1)
1. [ ]
(2, −2) (1, −1)

(0, 0) (−1, 1) (0, 0)


⎡ ⎤

2. ⎢ (−1, 1) (0, 0) (−1, 1) ⎥

⎣ ⎦
(0, 0) (1, −1) (0, 0)

 Exercise 2.5.2 : An Observation About Equilibrium Points


What do you notice about the values of the equilibrium points of the games in Exercise 2.5.1?

The big question we want to answer is “Can two equilibrium points for a two-player zero-sum game have different values?” By
experimenting with some examples, try to create an example of a game with two equilibrium points where those points have
different values for one of the players. If you can successfully create such an example, you will have answered the question. But
just because you can't find an example, that doesn't mean one doesn't exist!
After trying several examples, you might be beginning to believe that the answer to the above question is “no.” Now you are ready
to try to prove the following theorem:

Solution Theorem for Zero-Sum Games.


Every equilibrium point of a two-person zero-sum game has the same value.
Let's start with the 2 × 2 case. We will use a proof by contradiction. We will assume the theorem is false and show that we get a
logical contradiction. Once we reach a logical contradiction (a statement that is both true and false), we can conclude we were
wrong to assume the theorem was false; hence, the theorem must be true. Make sure you are comfortable with the logic of this
before moving on.
Since we want to assume the theorem is false, we assume we have a two-player zero-sum game with two different equilibrium
values. Since we don't have a specific example of such a game, we want to represent the game in a general form. In particular, we
can represent the general game
(a, −a) (c, −c)
[ ]
(d, −d) (b, −b)

Note that if a is negative, then −a is positive; thus, every possible set of values is represented by this matrix. We want to look at
the possible cases for equilibria.

 Exercise 2.5.3 : Equilibria in Column

Explain what goes wrong if (a, −a) and (d, −d) are equilibria with a ≠ d.

Hint
Think about the different cases, such as a < d, a > d.

 Exercise 2.5.4 : Equilibria in the Same Column/Row

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Generalize your answer to Exercise 2.5.3 to explain what goes wrong if the two equilibria are in the same column. Similarly,
explain what happens if the two equilibria are in the same row.

 Exercise 2.5.5 : Diagonal Equilibria


Does the same explanation hold if the two equilibria are diagonal from each other? (Explain your answer!)

From your last answer, you should see that we need to do more work to figure out what happens if the equilibria are diagonal. So
let's assume that the two equilibria are (a, −a) and (b, −b) with a ≠ b. It might be helpful to draw the payoff matrix and circle the
equilibria.

 Exercise 2.5.6 : A player Prefers the Value of an Equilibrium


Construct a system of inequalities using the fact that a player prefers an equilibrium point to another choice. For example,
Player 1 prefers a to d. Thus, a > d. List all four inequalities you can get using this fact. You should get two for each player–
remember that Player 1 can only compare values in the same column since he has no ability to switch columns. If necessary,
convert all inequalities to ones without negatives. (Algebra review: −5 < −2 means 5 > 2! )

 Exercise 2.5.7 : Create Strings of Inequalities

Now string your inequalities together. For example, if a < b and b <c then we can write a < b < c. (Be careful, the
inequalities must face the same way; we cannot write a > b < c! )

 Exercise 2.5.8 : You Now Have a Conclusion

Explain why you now have a contradiction (a statement that must be false). We can now conclude that our assumption that
a ≠ b was wrong.

 Exercise 2.5.9 : Diagonal Case for and

Repeat the above argument (Exercise 2.5.6, Exercise 2.5.7, and Exercise 2.5.8) for the case that the two equilibria are (d, −d)
and (c, −c) with d ≠ c.

 Exercise 2.5.10 : Summarize Conclusion

Explain why you can conclude that all equilibria in a 2 × 2 two-player zero-sum game have the same value.

We just worked through the proof, step-by-step, but now you need to put all the ideas together for yourself.

 Exercise 2.5.11 : The Complete Proof

Write up the complete proof for the 2 × 2 case in your own words.

 Exercise 2.5.12 : Generalizing to a Larger Game


Can you see how you might generalize to a larger game matrix? You do not need to write up a proof of the general case, just
explain how the key ideas from the 2 × 2 case would apply to a bigger game matrix.

Hint
Think about equilibria in (a) the same row, (b) in the same column, or (c) in a different row and column.

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We've seen that any two equilibrium points must have the same value. However, it is important to note that just because an
outcome has the same value as an equilibrium point, that does not mean it is also an equilibrium point.

 Exercise 2.5.13 : Equal Values May Not Be Equilibria

Give a specific example of a game matrix with two outcomes that are (0, 0), where one is an equilibrium point and the other is
not.

Working through the steps of a mathematical proof can be challenging. As you think about what we did in this section, first make
sure you understand the argument for each step. Then work on understanding how the steps fit together to create the larger
argument.
The next section summarizes all our work with finding equilibrium points for zero-sum games.

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2.6: Strategies for Zero-Sum Games and Equilibrium Points
Throughout this chapter, we have been trying to find solutions for two-player zero-sum games by deciding what two rational
players should do. In this section, we will try to understand where we are with solving two-player zero-sum games. The exercises
in this section are intended to review the concepts of dominated strategies, equilibrium points, and the maximin/minimax strategies.
By working through your own examples, we hope to tie these concepts together and ask some bigger questions about equilibrium
points. For example, should a player always play an equilibrium strategy? Will the maximin/minimax strategy always find an
equilibrium point if one exists? What should a player do if no equilibrium exists? Although the formal answers to some of these
questions are outside the scope of this book, you should be able to make some good conjectures about equilibrium points and
rational solutions to two-player zero-sum games.

 Exercise 2.6.1 : Random Matrix


Write down a random payoff (zero-sum) matrix with two strategy choices for each player.

 Exercise 2.6.2 : Random Matrix


Write down a random payoff (zero-sum) matrix with three strategy choices for each player.

 Exercise 2.6.3 : Random Matrix


Write down a random payoff (zero-sum) matrix with four strategy choices for each player.

 Exercise 2.6.4 : Analyze Several Examples


Exchange your list of matrices with another student in the class. For each matrix, you have been given
a. Try to determine any dominated strategies, if they exist.
b. Try to determine any equilibrium points, if they exist.
c. Determine the maximin and minimax strategies for Player 1 and Player 2, respectively. Can you always find these?

 Exercise 2.6.5 : Classify Examples

Now combine all the examples of payoff matrices in a group of 3 or 4 students. Make a list of the examples with equilibrium
points and a list of examples without equilibrium points. If you have only one list, try creating examples for the other list.
Based on your lists, do you think random payoff matrices are likely to have equilibrium points?

We want to use lists of matrices as experimental examples to try to answer some of the remaining questions we have about finding
rational solutions for games and equilibrium points. If you don't feel you have enough examples, you are welcome to create more
or gather more from your classmates.

 Exercise 2.6.6 : Playing an Equilibrium Strategy


If a matrix has an equilibrium point, can a player ever do better to not play an equilibrium strategy? Explain.

 Exercise 2.6.7 : Equilibria and Maximin/Minimax


If a matrix has an equilibrium point, does the maximin/minimax strategy always find it? Explain.

 Exercise 2.6.8 : No Equilibria and Maximin/Minimax


If a matrix does NOT have an equilibrium point, should a player always play the maximin/minimax strategy? Explain.

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 Exercise 2.6.9 : Strategy and Games with No Equilibria
If a matrix does NOT have an equilibrium point is there an ideal strategy for each player? Explain.

 Exercise 2.6.10 : Summarize the Connections

Write a brief summary of the connections you have observed between finding a rational solution for a game and equilibrium
points.

Now you should have an understanding of how to find equilibrium strategies in two-player zero-sum games. The main advantage
of equilibrium strategies is that if both players play them, neither player would have gained by playing a different strategy. Thus,
we can think of the equilibrium strategies as the solution to the game for two rational players. But what should our players do if the
game has no equilibrium point? We will look more closely at games with no equilibrium point in the next chapter.

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2.7: Popular Culture: Rationality and Perfect Information
In this section, we will look at applications of rationality and perfect information in popular culture. We present films with
connections to game theory and suggest some related questions for essays or class discussion.
The movie Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb (1964) depicts the cold war era with the USA
and the Soviet Union on the brink of atomic war.

 Exercise 2.7.1

Society would generally consider General Jack Ripper to be irrational. What is his goal or his optimal payoff? Give evidence
that he is, in fact, acting rationally in light of his goal.

 Exercise 2.7.2

Explain how the Soviet's Doomsday Machine is supposed to be the ultimate deterrent to nuclear war. How does the lack of
perfect information impact the effectiveness of the Doomsday Machine?

In the movie The Princess Bride (1987) the Dread Pirate Roberts and kidnapper Vizzini engage in a battle of wits in which Vizzini
is to deduce which goblet contain a lethal poison.

 Exercise 2.7.3

In your own words describe how the poison scene demonstrates that knowing that both players have the same knowledge can
help one deduce additional information. In other words, just knowing that one player has all the information is not enough; that
player, must also know that the other player has the same knowledge.

 Exercise 2.7.4

Of course, in the poison scene, both players break the rules. How does this impact the players' ability to use perfect
information?

Now try to apply the ideas of rationality and perfect information to your own popular culture examples.

 Exercise 2.7.5
Consider a game-theoretic scenario in a novel or film of your choice. Are the players rational? What are the players' goals, and
are they making choices which will maximize their payoff? Explain.

 Exercise 2.7.6
Consider the statement “One of the main differences between horror films and suspense films is that in horror films characters
behave irrationally while in suspense films they behave rationally.” Do you agree or disagree with this statement? Give an
example of a suspense film and a horror film with evidence from the films that supports your position.

 Exercise 2.7.7
Think of other films where two characters engage in a “game.” What are the assumptions of the players? Do they have perfect
information? Does the amount of information a player has give him or her an advantage? Explain.

 Exercise 2.7.8
Give an example from a film, current events, or your own life where if one player “breaks the rules,” while the other player
assumes perfect knowledge (both players know the possible strategies and outcomes), it will change the outcome of the

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“game.”

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CHAPTER OVERVIEW

3: Repeated Two-Person Zero-sum Games


If we are presented with a two-person zero-sum game we know that our first step is to look for an equilibrium point. If a game has
an equilibrium point, then we know that our players should play the corresponding strategy pair. In this case the equilibrium pair
and its payoff vector is the “solution” to the game. In this chapter we will explore games that do not necessarily have an
equilibrium point. We will also try to determine what a player should do if they play the game repeatedly.
3.1: Introduction to Repeated Games
3.2: Mixed Strategies: Graphical Solution
3.3: Using Sage to Graph Lines and Solve Equations
3.4: Mixed Strategies: Expected Value Solution
3.5: Liar's Poker
3.6: Augmented Matrices
3.7: Undercut

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1
3.1: Introduction to Repeated Games
Now that we are experts at finding equilibrium pairs, what happens when a game doesn't have any equilibrium pairs? What should
our players do?

 Example 3.1.1 : A Repeated Game


Consider the following zero-sum game
1 0
[ ]
−1 2

Does this game have an equilibrium pair? Play this game with an opponent 10 times. Tally your wins and losses. Describe how
you chose which strategy to play. Describe how your opponent chose which strategy to play.

When playing the game several times, does it make sense for either player to play the same strategy all the time? Why or why not?
Although we use the term “strategy” to mean which row (or column) a player chooses to play, we will also refer to how a player
plays a repeated game as the player's strategy. In order to avoid confusion, in repeated games we will define some specific
strategies.

 Definition: Pure Strategy


In a repeated game, if a player always plays the same row (or column), we say that she is playing a pure strategy.

For example, if Player 1 always plays Row A, we say she is playing pure strategy A.

 Definition: Mixed Strategy


If a player varies which row (or column) he plays, then we say he is playing a mixed strategy.

For example, if a player plays Row A 40% of the time and Row B 60% of the time, we will say he is playing a (.4, .6) strategy, as
we generally use the probability rather than the percent. The probabilities of each strategy will be listed in the same order as the
strategies in the matrix.
It is not enough just to determine how often to play a strategy. Suppose Player 1 just alternates rows in Example 3.1.1. Can Player
2 “out-guess” Player 1? What might be a better way for Player 1 to play?
We'd really like to find a way to determine the best-mixed strategy for each player in repeated games. Let's start with what we
already know: games with equilibrium points. If a game has an equilibrium pair, would a player want to play a mixed strategy?
Recall that a strategy pair is an equilibrium pair if neither player gains by switching strategy.

 Example 3.1.2 : Repeating a Game with an Equilibrium


Consider the following zero-sum game
−1 1
[ ]
0 2

This game has an equilibrium pair. Convince yourself that if this game is played repeatedly, each player should choose to play
a pure strategy.

Thus, if the game has an equilibrium we know that players will play the pure strategies determined by the equilibrium pairs. So let's
get back to thinking about games without equilibrium pairs. If we play such a game once, can we predict the outcome? What about
if we repeat the game several times– can we predict the outcome? Think about tossing a coin. If you toss it once, can you predict
the outcome? What if you toss it 100 times– can you predict the outcome? Not exactly, but we can say what we expect: if we toss a
coin 100 times we expect to have half of the coins turn up heads and half turn up tails. This may not be the actual outcome, but it is
a reasonable prediction. Now is a good time to remind yourself about finding the expected value!!

3.1.1 https://math.libretexts.org/@go/page/82767
Recall the familiar game Rock-Paper-Scissors: ROCK beats SCISSORS, SCISSORS beat PAPER, and PAPER beats ROCK. Using
the payoff matrix and experimentation, we will try to determine the best strategy for this game.

 Exercise 3.1.1 : RPS Payoff Matrix

Construct a game matrix for Rock-Paper-Scissors.

 Exercise 3.1.2 : RPS and Equilibrium Points

Is Rock-Paper-Scissors a zero-sum game? Does it have an equilibrium point? Explain.

 Exercise 3.1.3 : Play RPS

We want to look at what happens if we repeat Rock-Paper-Scissors. Play the game ten times with an opponent. Record the
results (list strategy pairs and payoffs for each player).

 Exercise 3.1.4 : Conjecture a Strategy

Describe any strategy you used in Exercise 3.1.3.

 Exercise 3.1.5 : Strengths and Weaknesses of Your Strategy

Reflect on your chosen strategy. Does it guarantee you a “win”? What should it mean to “win” in a repeated game? What are
the strengths and weaknesses of your strategy?

 Exercise 3.1.6 : Share Your Strategy

Discuss your strategy with someone else in the class (it can be your opponent). After sharing your ideas for a strategy, can you
improve your previous strategy?

Although you may have come up with a good strategy, let's see if we can't decide what the “best” strategy should be for Rock-
Paper-Scissors. Let's assume we are playing Rock-Paper-Scissors against the smartest player to ever live. We will call such an
opponent the “perfect” player.

 Exercise 3.1.7 : The Weakness of a Pure Strategy


Explain why it is not a good idea to play a pure strategy; i.e., to play only ROCK, only PAPER, or only SCISSORS.

 Exercise 3.1.8 : An Uneven Strategy

Does it make sense to play one option more often than another (for example, ROCK more often than PAPER)? Explain.

 Exercise 3.1.9 : Frequency of , ,

How often should you play each option?

 Exercise 3.1.10 : Playing a Pattern

Do you want to play in a predictable pattern or randomly? What are some advantages and disadvantages of a pattern? What are
some advantages and disadvantages of a random strategy?

3.1.2 https://math.libretexts.org/@go/page/82767
1
Hopefully, you concluded that the best strategy against our perfect player would be to play ROCK, PAPER, SCISSORS of the
3
1
time each, and to play randomly. We can say that our strategy is to play each option randomly with a probability of , and call this
3
1 1 1
the Random( , , ) strategy.
3 3 3

 Exercise 3.1.11 : Long-Term Payoff

Using this “best” strategy, what do you predict the long term payoff will be for Player 1? For Player 2?

 Exercise 3.1.12 : Testing the Random Strategy

Let's check our prediction. Using a die, let 1 and 2 represent ROCK, 3 and 4 represent PAPER, and 5 and 6 represent
SCISSORS. Play the game 20 times with someone in class where each player rolls to determine the choice of ROCK, PAPER,
or SCISSORS. Keep track of the strategy pairs and payoffs. What was the total payoff for each player? (At this point, if you
still feel that you have a better strategy, try your strategy against the random one– see what happens!)

 Exercise 3.1.13 : Compare to Your Prediction

How did the actual outcome compare to your predicted outcome? What do you expect would happen if you play the game 100
times? (Or more?)

Using ideas about probability and expected value we can more precisely answer Exercise 3.1.13.

 Exercise 3.1.14 : Probabilities When Both Players Play the Random Strategy
1 1 1
Assume both players are using the Random( , , ) strategy. List all the possible outcomes for a single game (recall the
3 3 3

outcome is the strategy pair and the payoff, for example [R, P ], ). What is the probability that any particular pair of
(−1, 1)

strategies will be played? Are the strategy pairs equally likely?

 Exercise 3.1.15 : Expected Value

Using the probabilities and payoffs from Exercise 3.1.14 calculate the expected value of the game for each player.

 Exercise 3.1.16 : Strategy For the Repeated Game

Now consider the matrix from Example 3.1.1 above:


1 0
[ ]
−1 2

See if you can determine how often Player 1 should play each row, and how often Player 2 should play each column. Try
testing your proposed strategy (you may be able to use a variation on the dice as we saw in Exercise 3.1.12). Write up any
conjectured strategies and the results from playing the game with your strategy. Do you think you have come up with the best
strategy? Explain.

You may have had an idea about the best way to play Rock-Paper-Scissors before working through this section, but how can we
find solutions to other games, such as the one in Exercise 3.1.16? We don't want to just use a “guess and check” method. Especially
since there are infinitely many possible mixed strategies to try! The rest of the chapter will develop mathematical methods for
solving repeated games with no equilibrium point.

3.1.3 https://math.libretexts.org/@go/page/82767
This page titled 3.1: Introduction to Repeated Games is shared under a CC BY-SA 4.0 license and was authored, remixed, and/or curated by
Jennifer A. Firkins Nordstrom via source content that was edited to the style and standards of the LibreTexts platform; a detailed edit history is
available upon request.

3.1.4 https://math.libretexts.org/@go/page/82767
3.2: Mixed Strategies: Graphical Solution
In this section we will learn a method for finding the maximin solution for a repeated game using a graph.
Let's continue to consider the game given in Example 3.1.1 by
1 0
[ ]
−1 2

In order to make our analysis easier, let's name the row and column strategies as in Table 3.2.1.

Table 3.2.1: Example 3.1.1 with Named Strategies

C D

A 1 0

B −1 2

We want to determine how often Player 1 should play A and how often she should play B.

 Exercise 3.2.1 : Conjecture a Strategy


First, it is good to test your instinct. Do you think she should play one of the strategies more often than the other? If so, which
strategy should she play the most?

What we are really trying to find is the probability with which Player 1 plays A (or B). Since we know that the probabilities sum to
one, if we can find one probability, then we know the other.
Here is one way to do this. Let p be the probability that Player 1 plays B. Let m be the payoff to Player 1. Since we are trying to
find a mixed strategy for Player 1, we will pick a strategy for Player 2 and try to determine the possible payoffs for Player 1.
Let us determine some pairs (p, m).
Step 1: Assume Player 2 plays pure strategy C.
Step 1a: Find the probability (p) and payoff (m) if Player 1 always plays A. If Player 1 plays pure strategy A, then she never plays
B. Thus the probability she plays B is 0. Hence, p = 0. In the case where Player 1 plays A and Player 2 plays C, what is the payoff
to Player 1? This is m, so m = 1. Thus, for the strategy pair [A, C ] we get (0, 1) for (p, m). It is important to note that (0, 1) is
not a payoff vector. This is common notation for any ordered pair. With payoff vectors, the ordered pair represents the payoff to
each player. Here the ordered pair represents a probability of playing B and the payoff to Player 1.
Step 1b: Find the probability (p) and payoff (m) if Player 1 always plays B. If Player 1 plays pure strategy B, then what is the
probability that she plays B? Since she always plays B, p = 1. In the case where Player 1 plays B and Player 2 plays C, what is the
payoff to Player 1? m = −1. Thus, for the strategy pair [B, C ] we get (1, −1) for (p, m).
Step 1c: Now we want to know what Player 1's payoff will be as she varies the probability, p, with which she plays B. We can
draw a graph where the x-axis represents to probability with which she plays B (p) and the y -axis represents the expected payoff (
m ). See Figure 3.2.1.

3.2.1 https://math.libretexts.org/@go/page/82768
Figure 3.2.1 : Labeled axes. (Copyright; author via source)
Thus, when Player 1 plays only A, she is playing B with probability 0; when Player 1 plays only B, she is playing B with
probability 1. It might be easier to remember if you label your graph as in Figure 3.2.1.
Step 1d: Now we can plot the points we determined in Step 1a and Step 1b. We will connect them with a line representing Player
2's pure strategy C. See Figure 3.2.2.

Figure 3.2.2 : Player 2's strategy C. (Copyright; author via source)


Before moving on, let's make sure we understand what this line represents. Any point on it represents the expected payoff to Player
1 as she varies her strategy, assuming Player 2 only plays C. In this case, we can see that as she plays B more often, her expected
payoff goes down.
Now let's do the same thing, assuming Player 2 plays only D.
Step 2: Assume Player 2 plays pure strategy D.
Step 2a: Find the probability (p) and payoff (m) if Player 1 always plays A. If Player 1 plays pure strategy A, then what is the
probability that she plays B? p = 0. What is the payoff to Player 1? m = 0. Thus, for the strategy pair [A, D] we get (0, 0) for
(p, m).

Step 2b: Find the probability (p) and payoff (m) if Player 1 always plays B. If Player 1 plays pure strategy B, then what is the
probability that she plays B? p = 1. What is the payoff to Player 1? m = 2. Thus, for the strategy pair [B, D] we get (1, 2) for
(p, m).

Step 2c: Now, on our same graph from Step 1, we can plot the points we determined in Step 2a and Step 2b. We will connect them
with a line representing Player 2's pure strategy D. See Figure 3.2.3.

3.2.2 https://math.libretexts.org/@go/page/82768
Figure 3.2.3 : Player 2's strategy D. (Copyright; author via source)
Now we can see that if Player 2 plays only D, then Player 1 does best by playing only B.
So we have this nice graph, but what does it really tell us? Although we drew lines representing each of Player 2's pure strategies,
Player 1 doesn't know what Player 2 will do. Suppose Player 1 only played A, while Player 2 plays an unknown mixed strategy.
Then the possible payoffs for Player 1 are 1 or 0. The more often Player 2 plays C, the more often Player 1 gets 1. So the expected
payoff per game for a repeated game varies between 0 and 1. We can see the possible expected values as the red line on the graph
in Figure 3.2.4.

Figure 3.2.4 : Figure 3.2.4 of the expected payoffs for Player 1 playing only A. (Copyright; author via source)
Since we want to understand mixed strategies for Player 1, what would happen if Player 1 played A half the time and B half the
1
time? In other words, what happens if p = ? Although we may not easily be able to see the exact values, we can represent the
2
possible expected values on the graph in Figure 3.2.5.

Figure 3.2.5 : The expected payoffs for Player 1 playing B half the time. (Copyright; author via source)
Hopefully, you've begun to see that for each choice of p, the top line represents the highest expected value for Player 1; the bottom
line represents the lowest expected value for Player 1; the area between the lines represents the possible expected values for Player
1. As we did with non-repeated games, let's look at the “worst case scenario” for Player 1. In other words, let's assume that Player 2
can figure out Player 1's strategy. Then Player 1 would want to maximize the minimum expected value. Aha! This is just looking for
the maximin strategy!

3.2.3 https://math.libretexts.org/@go/page/82768
Now the minimum expected value for each choice of p is given by the bottom lines on the graph, shown in red in Figure 3.2.6.

Figure 3.2.6 : The minimum expected payoffs for Player 1. (Copyright; author via source)
It should be easy to see that the maximum of the minimum expected payoffs occurs at the intersection of the two lines.
Step 3: Find the intersection of the two lines.
Step 3a: Find the equation for Line C. This is the line passing through the points (0, 1) and (1, −1). It has slope −2 and y -
intercept 1. Thus, it has equation y = −2x + 1. [Although the x-axis represents probability p and the y -axis represents expected
payoff m, you are probably more comfortable solving equations–at least for the moment–in x and y.]
Step 3b: Find the equation for Line D. This is the line passing through the points (0, 0) and (1, 2). It has slope 2 and y -intercept 0.
Thus, it has equation y = 2x.
Step 3c: Use substitution to find the point of intersection.
2x = −2x + 1

4x =1

1
x =
4

1 1 1 1
Substituting x = back in to either original equation, say y = 2x, gives us y = . Thus, the point of intersection is ( , ).
4 2 4 2

Step 4: Determine Player 1's maximin mixed strategy. Recalling that the first coordinate is p, the probability that Player 1 plays B,
1 3 1 3
we know that Player 1 will play B with probability , and thus, play A with probability [1 − = ]. The expected payoff for
4 4 4 4
1
Player 1 is . It is important to check back to your original intuition about the game from Exercise 3.2.2 . Did it seem as though
2
Player 1 should play A more often than B?
1
Let's make a few important observations. First, it should be clear from the graph that Player 1 expects a payoff of NO MATTER
2
1
WHAT PLAYER 2 DOES. Furthermore, since this is a zero-sum game, we know that Player 2's expected payoff is − . It is
2
important to note that this graph does not give us any information about an optimal strategy for Player 2. We will see how to find a
strategy for Player 2 in the following exercises. Can you think of how you might do this?
We can use the graphical method to find the maximin and minimax mixed strategies for repeated two-person zero-sum games.
Using the same game matrix as above:
1 0
[ ]
−1 2

we will continue to label Player 1's strategies by A and B, and Player 2's strategies by C and D. We now want to determine the
minimax strategy for Player 2. Keep in mind the payoffs are still the payoffs to Player 1, so Player 2 wants the payoff to be as small
as possible.

 Exercise 3.2.2 : Sketch the Graph

3.2.4 https://math.libretexts.org/@go/page/82768
Sketch the graph for Player 1 that we drew above. Be sure to label the endpoints of each line. Also label each line according to
which strategy they represent.

 Exercise 3.2.3 : Indicate the Minimax Strategy

Describe the minimax strategy and show it on the graph. (You do not need to find the actual mixed strategy for Player 2.)

 Exercise 3.2.4 : Payoff Vectors


Are the payoff vectors for the maximin and minimax strategies the same?

For non-repeated games we have seen that if the maximin value is the same as the minimax value, then the game has a pure
strategy equilibrium. The same idea applies to mixed strategy games. If the value of the maximin strategy is the same as the value
of the minimax strategy, then the corresponding mixed strategies will be an equilibrium point. Thus, your answer to Exercise 3.2.4
should tell you this game has a mixed strategy equilibrium point consisting of the maximin/ minimax strategy.
We now know that Player 2 wants to play the minimax strategy in response to Player 1's maximin strategy, so we need to find the
actual mixed strategy for Player 2 to employ. Since we are minimizing Player 1's maximum expected payoff, we will continue to
use the matrix representing Player 1's payoff. We will repeat the process we used for Player 1, except the x-axis now represents the
probability that Player 2 will play D, and the lines will represent Player 1's strategies A and B. The y -axis continues to represent
Player 1's payoff.

 Exercise 3.2.5 : Draw the Axes for Player 2's Strategy.

First sketch the axes. (Recall, the x-axis only goes from 0 to 1.)

 Exercise 3.2.6 : Player 1 Plays

Assume Player 1 only plays A.


a. If Player 2 only plays C , what is the payoff to Player 1? Recall we called this m. What is the probability that Player 2 plays
D? Recall we called this p. On your graph, plot the point (p, m ).

b. If Player 2 plays only D, find m and p. Plot (p, m) on the graph.


c. Now sketch the line through your two points. This line represents Player 1's pure strategy A and the expected payoff (to
Player 1) for Player 2's mixed strategies. Label it A.

 Exercise 3.2.7 : Player 1 Plays

Now assume Player 1 plays only B. Repeat the steps in Exercise 3.2.6, using B instead of A, to find the line representing
Player 1's pure strategy B. (Label it!)

 Exercise 3.2.8 : The Graph For Player 2

It is important to keep in mind that although the x-axis refers to how often Player 2 will play C and D, the y -axis represents
the payoff to Player 1.
1. Explain why we are looking for the minimax strategy for Player 2.
2. Show on the graph the maximum payoff that Player 1 can expect for each of Player 2's possible mixed strategies.
3. Show the point on the graph that represents the minimax strategy.

 Exercise 3.2.9 : Equations For the Lines

Find the equations of the lines you drew in Exercise 3.2.6 and Exercise 3.2.7.

3.2.5 https://math.libretexts.org/@go/page/82768
Other documents randomly have
different content
Once we had a pack-horse with us, laden with stores and utensils for
a surveyor's camp. He was led with a rope as we rode. Just at one of
the worst parts he broke away and bolted, kicking and bucking as he
went, the result being that the baggage went flying in all directions.
It took us half a day or more to recapture the horse, and to pick up
his scattered load. This will serve to illustrate some of the pleasing
incidents of travel in the bush.
On one occasion Old Colonial, Dandy Jack, and I were camped
somewhere beyond Whangarei. We were making the journey up to
fetch down some cattle. We were in a little dingle beside a small
stream. The huge fire was blazing merrily in front, lighting up the
tree-trunks with weird effect, and making the shadows of the forest
round us seem more profound. Near by our horses were tethered,
and we lay, now our supper was done, rolled in our blankets, pipes
in mouth, and heads pillowed on our saddles.
We were talking of some improvements that had been recently
effected in the settlements, and from that we got to speculating on
the future. Dandy Jack was wearily sighing for the good time when
there should be a decent road constructed along this route.
"Wonder whether I shall live to see it;" he said.
"Of course you will," replied Old Colonial, who is nothing if not
optimistic in his views.
"I tell you what; we shall all live to see not only a good road through
this, but farms and settlements and hotels along it!"
"Bravo!" returned Dandy Jack. "Then I'll start a coach to run from
Kawa-kawa to Whangarei, and on to Mangawai, or across to Te Pahi,
perhaps. Might pick up some trade, don't you think?"
"I reckon your coach would be a failure, old man," continued Old
Colonial. "I expect to see a railway one of these days, connecting
Auckland with the Bay, and all the places between. Not much room
for your coach then!"
"Oh, they'll not make a railroad up here this century."
"I expect they will, though," said our chief, impressively.
"And, look here! I'll tell you what's going to help make business for
it. The Bay and Hokianga are our classic ground."
"Classic ground?"
"Certainly. Here are the places where Captain Cook came, and
Tasman, and all the early voyagers. Here's where the first
missionaries came; where colonization commenced; where British
sovereignty was established. Here's where the history of the early
days has got to be written. Here's where Hongi lived, and Hone
Heke after him; where the first Maori war was fought; where battles
were won, and pas stormed, and treaties signed. This is the most
illustrious district in the whole colony. Whatever memories we've got
date from here. I tell you that streams of tourists will want to come
and see these places some day. We ought to make more of them
now than we do."
So rhapsodized Old Colonial, after a manner that occasionally affects
him, while the forest gleamed redly round us with the reflection of
our camp-fire, and a bittern boomed in mockery and remonstrance
from a neighbouring swamp. I heard Dandy Jack softly murmuring
to the trees—
"Meet nurse for a poetic child;
Land of brown heath and shaggy wood!
Land of the mountain and the flood!"
And when Old Colonial attempted to continue—
"If this isn't classic ground, what is, I should like to know? Posterity
will——"
Dandy Jack cut him short with a loud declamation from "Locksley
Hall." But I remembered the allusion to classic ground, in spite of
our merriment at the time, and, accordingly, it finds effect in this
chapter.
The little settlement of Mangapai is much like those we are
accustomed to in the Kaipara. It is situated on a creek and inlet of
the Whangarei Harbour. But the township of Whangarei itself, some
eight miles further north, is in a considerably more advanced stage
than anything we can show.
The harbour is something like our Kaipara, only of less extent. It is a
considerable inlet of the sea, with Heads at the entrance, some tidal
rivers, and creeks navigable for a short distance. There is direct
communication by sea with Auckland, kept up by means of sundry
schooners and sailing-craft. The large steamer Iona, which plies
between Auckland, Bay of Islands, and Mongonui every week, calls
at Whangarei Heads on each trip for passengers. A small steamer
plies within the harbour itself.
Whangarei township is a remarkably favourable specimen of a bush
settlement. It stands on a river, and is about seventeen miles distant
from the Heads. The little town occupies a flat, rendered very
picturesque by the gardens about the houses, and by a surrounding
amphitheatre of bush-clothed heights. There is a church, hotels,
stores, schools, mills, streets and roads, even a local newspaper, to
bear evidence to the energy and prosperity of the settlers.
The district round about the Whangarei waters is rich soil for the
most part, mainly covered with bush in its natural condition.
Settlement took place here a good many years before it was begun
in the Kaipara, consequently more improvement has been effected.
The pioneer farms and homesteads show a surprising amount of
comfort. They have lots of grass for pasturage, and two or three
thousand acres of plough-lands in the aggregate as well.
Then there are two special industries in the place. One is lime-
burning, the product being sent to supply Auckland demands for it.
The other is coal-mining. A mine was opened here some years ago,
and was afterwards flooded and consequently closed, remaining
unworked for some time. It has now again been re-opened, and is in
full swing of work, though the operations are only carried out in a
small way comparatively.
One would think that the road, so called, connecting two settlements
of such relative importance as Whangarei and Kawa-kawa, would be
a better one than it is. The distance is between forty and fifty miles,
and there is no settlement between. The road is just a track, along
which it is possible to ride and drive cattle. A good part of the way
lies through heavy bush.
But there is really very little traffic between these places, and what
there is can be best transacted by sea. It is the general fashion in a
country like this. Each settlement requires water-communication with
Auckland, and cares little at present for anything else. A settler
makes a road down to the river, or to the settlement on the river,
sufficient for his own purposes, and as short as possible. That is all
he particularly wants. The necessity for roads between settlements,
and to open up the back-country, only grows gradually with time. Of
course in other parts of the colony, where there is not water
everywhere as in the North, the case is widely different. A good road
or a railway is the first and chief thing needed there.
At Kawa-kawa we are in the Bay of Islands, and consequently within
the classic ground. Indeed, south-east of Kawa-kawa is the site of
the famous pa of Ruapekapeka, which was a strong native fortress,
constructed with a degree of skill, and science almost, that
astonished military engineers.
The Kawa-kawa river gives its name to the district. There is a good
deal of settlement and pioneer-farming round here and in Pakaru
district, but the chief industry of the place is coal-mining. A hundred
to a hundred and fifty colliery hands are employed, forming, with
their families, a good nucleus of population. Manganese and cement
are also mined here.
The seam is twelve and a half feet thick; and the output about three
thousand tons a month. There are some half-dozen miles of railway,
connecting the mine with a suitable shipping-place, near where the
river joins the waters of the bay itself. A fleet of coasters is
constantly employed carrying coal to Grahamstown and Auckland.
Extensive coal-beds exist in many parts of the North, but Whangarei
and Kawa-kawa are the only workings at present. I have seen some
carbonized cocoa-nuts extracted from the Kawa-kawa mine, which
prove that the cocoa-nut palm must once have grown here, though
it does not now.
There is nothing particularly classic about a colliery village, however,
although it may be situated in a primeval solitude, and amid
woodland scenery, where axe and spade are busy converting the
wilds into cultivated farms. The river winds down through grand
mountainous tracts, and then we find ourselves on the bosom of the
gloriously beautiful bay, the most picturesque and most romantic of
all places in the North—more, the home of the first chapters of our
history.
I will not go so far as to say that the Bay of Islands is as lovely as
Sydney Harbour, nor can I allow that it throws certain choice bits of
scenery in the Kaipara and the Hokianga estuaries entirely into the
shade. But it certainly is a most picturesque place. The views are so
varied, so wholly unique; and the stories connected with every
corner of the bay throw such a romantic halo over the whole, that I
feel quite justified in endorsing the opinion that the Bay of Islands is,
and always must be, the most remarkable place in Northern New
Zealand.
The entrance of the bay is guarded by two great rocky headlands,
Cape Wiwiki and Cape Brett. These stand some twelve miles apart,
and the distance from them to the back of the bay is about twenty
miles. But numerous inlets open up into the land, and four
considerable creeks, the Keri-keri, Waitangi, Kawa-kawa, and Waitari
fall into the bay, forming large estuaries at their junction with it. The
promontories, headlands, and indentations of the shores, together
with the hundred islands and islets that thickly stud the waters,
diversify the scenery very much, and cause you to think, as you sail
or row between them, that you are gliding from river into river and
from channel into channel, with broad lake-like reaches interspersed.
About fifteen miles from Cape Brett, and on the same side of the
bay, a promontory of considerable size juts out. Upon the inner side
of this stands Kororareka, capital of the Bay, and its port of entry.
Officialism has recently been trying very hard to alter the name of
this place into Russell, which action is much deprecated by settlers,
who insist upon retaining the old native name. The reason for the
proposed change is not very clear, and why this particular town
should have been so singled out is equally inexplicable to the
unofficial mind. It seems to be a great pity, in any case, to bestow
such names as Smithville, or Russell, or New London upon growing
settlements, the future cities of a future nation. It is a pity because
they are not distinctive, nor expressive of the country upon which
they are grafted. How much better to retain the old native names,
which carry with them sound and meaning both original and
peculiar. Educated Americans are beginning to find this out, and to
regret the loss of an indigenous character, which springs from the
vulgarity and confusion of their nomenclature. How much better are
such names as Pensacola or Tallahassee, than New Orleans or New
York?
In New Zealand native names have been very largely retained,
though less so in the south than in the north. But jacks in office are
for ever trying to perpetuate their own names, or those of
individuals whom they toady, by making them do duty for towns or
counties or rivers. It is a "vulgarian atrocity," similar to that which
moves a cockney soul to scratch its ignoble appellative upon pyramid
or monolith.
In this particular instance, it is a positive shame to hurl such an
insulting degradation into our classic ground. Kororareka, under that
name, is the oldest settlement in the colony. It is intimately
associated with early history. Kororareka—"The Beach of Shells"—
was once a native kainga. Then it became a whaling station, and
earned notoriety as a piratical stronghold, and the pandemonium of
the Pacific. From that it was erected into the first capital of the
colony, metropolis and seat of government for all New Zealand,
under Mr. Busby, the British resident, and, in 1840, Captain Hobson,
the first governor. It was plundered and burnt by Heke and Kawiti,
and was a central point of the first Maori war.
Kororareka is a quiet little village now, and is never likely to grow
into much more, unless it should become a manufacturing centre.
Other places must take the trade of the district eventually. Hence,
Kororareka will always rest its chief claim to note upon its past
history; so to call it Russell is to spoil its little romance. It is an
outrageous vandalism, a nonsensical piece of spite or idiotcy that, in
a philological and sentimental sense, is almost to be regarded as a
crime.
As you come into sight of Kororareka from the bay, you are
favourably impressed by its appearance. The town stands upon a
wide flat, bordered by a high beach of white shingle and shells, from
the centre of which a large wharf runs out for shipping to come
alongside. A street of houses, stores and hotels principally, faces the
beach, and gives the place all the airs of a miniature Brighton or
Margate. Some other straggling streets run back from this.
The background is a low grassy range, evidently farm-lands. This
range shuts out all view of the bay on the other side of the
promontory. To the right it merges into the mountain tract that
sentinels the Waitari and Kawa-kawa estuaries. On the left rises an
abrupt and wooded hill, fissured with many romantic little glens and
hollows. From this eminence, to which a road winds up from the
town through the woods, a most magnificent view is obtainable. A
great part of the panorama of this island-studded harbour lies
stretched below one's feet; and on the highest crest is a certain
famous flagstaff.
Kororareka is not very large. The resident population is probably not
more than two or three hundred. Farming industry round it is
comparatively small. Its communication overland with other places is
not good, and the hilly character of the contiguous land presents
great difficulties in the way of the formation of roads. The place
depends on its harbour, which is much used by whalers, who come
here to tranship or sell oil, and to take in supplies. Quiet and dead-
alive as it seems in general, there are times when a number of
vessels are assembled here, and when bustle and business is
consequently pretty brisk.
Before settled government and colonization overtook New Zealand,
this spot had achieved an unsavoury reputation. Originally a native
town, it had gradually become the resort of whaling-ships. Traders
established themselves here, and a rowdy population of runaway
sailors, ex-convicts, bad characters, and debauched Maoris filled the
place. Drunkenness and riot were the general order of things; and it
was even said that Kororareka was developing into a nest of pirates.
There was no sort of government to restrain the evil, and man's
passions, as usual, were transforming a natural Eden into a moral
hell.
During these days of anarchy there is no doubt that Kororareka was
a sad thorn in the side to the missionaries, who were achieving
wonderful results among the native tribes. The wanton profligacy of
whites in Kororareka infected their converts, and interfered sadly
with the Christianizing of the Maoris. Moreover, other places of a like
nature began to spring up here and there on the coasts.
One would have thought that sober, God-fearing men would have
hailed the establishment of British government, and would have
done much to further colonization. Such, however, was far from
being the idea or action of the early missionaries. So far as the
missionaries in New Zealand were themselves concerned, they would
seem to have turned a very cold shoulder to such of their
countrymen as adventured thither, independently of the missions. So
we are informed by one or two travellers who visited the country
between 1814 and 1840. Nor is this feeling at all to be wondered at,
considering the class of men who came to Kororareka. The European
adventurers who came to New Zealand then were so generally of a
loose and lawless order, that it is scarcely matter for surprise that
missionaries should have looked askance at every white man they
saw.
This feeling spread to the Societies at home in England, and was,
doubtless, much exaggerated among their more zealous, but less
large-minded supporters. It became mingled with a desire to
preserve New Zealand for its aboriginal race; to convert and civilize
that people; and to foster their self-government under the direct
influence of the missionaries. And it must be borne in mind that the
missionaries were really unacquainted with the extent of the country,
and with the actual number of its native inhabitants; while people in
England had very vague ideas regarding their antipodes.
A party was formed in England, which has been styled "the Exeter
Hall party." The persons adhering to its views did all in their power
to prevent English colonization, or English government being
established in New Zealand. The merits of the question as between
them and their opponents need not concern us now.
The existence of such a place as Kororareka was felt to be a curse to
the whole of the South Sea, and did not fail to affect even Sydney,
two thousand miles away. There were not wanting some to press
upon the Imperial Government the necessity of annexation and of
active steps being taken. The Exeter Hall party, however, frustrated
their endeavours, actuated thereto by motives that time has shown
to have been founded on miscomprehension and mistake.
Guided by the Exeter Hall influence, and by representations made by
the missionaries, the Imperial Government took a decided step in
1835. They recognized New Zealand as independent, treated with a
confederation of Maori chiefs, and bestowed a national flag upon the
country, thus forfeiting the claim acquired from Captain Cook's
original discovery. Mr. Busby was appointed to be British resident at
Kororareka; as, however, he had no force to act with, he was unable
to preserve order in that place, and he had neither influence nor
power wherewith to uphold the dignity of his office and of the
country he represented.
Persons in England who had been desirous of seeing New Zealand
converted into an appanage of the British crown, covered their
disappointment by forming an association, styled "The New Zealand
Company," much upon the basis of the old East Indian Company.
They proceeded to form settlements upon a system of their own; a
pioneering expedition being sent out in 1839, and the first body of
emigrants landing at Port Nicholson in 1840. Their action, together
with the outcry caused by the condition of things at Kororareka,
caused the Imperial Government to reverse its former policy.
Another circumstance operated to hasten the Government's decision.
French Roman Catholic missions had been established in New
Zealand, and were gaining many converts among the Maoris. In
1837 a French nobleman, one Baron de Thierry, purchased a large
area in Hokianga, and sought to establish himself there as a
sovereign prince. Then the French Government prepared to annex
the islands as a possession of France.
In January, 1840, Captain Hobson arrived at Kororareka in command
of H.M.S Rattlesnake, instructed to hoist the British standard, which
he only succeeded in doing a few hours before a French ship arrived
for a similar purpose. Captain Hobson at once found a staunch ally in
the person of Tamati Waka, a powerful Ngapuhi chief. By this man's
influence the Christianized chiefs of the North were gathered
together, and induced to sign the famous Treaty of Waitangi, on
March 5, 1840. That instrument is the title-deed of the colony. It was
the formal cession of sovereignty to Queen Victoria, by the principal
men of the Maori nation.
The missionaries have been severely criticized for the policy and line
of action adopted by them, and by the Exeter Hall party at home.
Doubtless much might be said on either side, were it in any way
desirable to reopen a somewhat bitter controversy. One thing is
certain, that nowhere, and at no time, have missionaries of the
Church of England, and of the Wesleyan body, found their labours
followed by more signal success than in New Zealand; and the zeal,
fortitude, and high-souled devotion of the pioneers of the gospel in
our Brighter Britain, must surely win the admiration of even the
enemies of Christianity.
Not far from Cape Wiwiki, on the northern shore of the Bay of
Islands, and half a day's sail away from Kororareka, is a spot of
great interest. Sheltered within high craggy headlands, and shut out
from the open bay by a rocky and bush-clothed island, is a bright
and peaceful little cove. There are but few signs of life here; the
place looks almost deserted. A couple of houses are visible, divided
by rising ground; and a farm lies round them, bounded by hills
wearing the evergreen verdure of the forest.
Walking about this farm, you perceive that it is not of very great
extent—a hundred acres or so, probably. But you are at once struck
with something that is strange to you, after the pioneer homesteads
of the Kaipara. The turf is old and smooth, the fields are drained and
level, the ditches are embanked, the hedges full-grown and thick,
the imported trees are in maturity. Everything denotes that this is no
new clearing. Abundant evidence is all around to testify to the truth
of what the hospitable farmer will tell you, namely, that the
cultivation here is sixty years old.
This place is Te Puna, ever to be renowned as the site of the first
mission, established here by the Rev. Samuel Marsden, in 1814.
The incentives those early missionaries had to go to New Zealand
were certainly not of an engaging kind. They knew that the natives
were a fierce and bloodthirsty set of savages, that they were
constantly at war among themselves, and were addicted to
cannibalism. Although some few individuals had visited Sydney, and
seemed tractable enough, assuring Mr. Marsden of their good will
and power to protect missionaries, yet there was no sort of certainty.
The Maoris were known to be badly disposed to strangers, on the
whole, and many stories of their treachery were current. Since
Marion du Fresne, with fifteen men, was killed by Maoris in the Bay
of Islands, there had been various instances of a similar kind. Only a
year or two before, the ship Boyd had been seized in Whangaroa
Harbour, and her company, numbering fifty persons, had been
butchered and eaten.
With these facts before their minds to encourage them, Marsden and
his brave companions went unhesitatingly into what must have
seemed the very jaws of death, resolved to sow the gospel seed in
this virgin wild. In December, 1814, the Revs. Marsden, Kendall,
King, and Nicholas landed here at Te Puna. Public worship was held
here for the first time on Christmas Day.
At that period there was a large population on the shores and
islands of the bay, which has since disappeared or moved elsewhere,
for the most part. There would seem to have been a considerable
kainga either at or near Te Puna. Here, therefore, land was bought,
houses and a church of some kind put up, and the mission duly
inaugurated. One of the missionaries was actually accompanied by
his wife, and she gave birth to a son shortly after they landed. He
was the first white man born in New Zealand, and he still resides
near the bay, with other families descended from the same parents.
Some of us have often partaken of their hospitality.
There is no mission at Te Puna now, and only the two households for
population, but the original mission continued there a good many
years. Soon after its origination, another station was opened on the
Keri-keri river, about twenty miles from Te Puna. Here there is a
stone block-house, which was erected for defence, if necessary. It is
now used as a store. There is besides a most comfortable
homestead, the residence of a family descended from one of the
early missionaries. It is a very pleasant spot, with all the air of an
English country grange, save and except that block-house, and other
mementoes of the past that our hospitable hosts have been pleased
to show us.
Some miles along the shore of the bay, from the point where the
Keri-keri estuary opens from it, we come to Paihia, at the mouth of
the Waitangi. This is directly opposite to Kororareka, from which it is
five or six miles distant. Just down the shore is a villa residence, and
one or two other houses, indicating the farm of a wealthy settler. A
splendidly situated home that, with its glorious view over the
picturesque bay, its surrounding gardens and orchards, and its
background of woods and mountains. Here was where the first
printing-press in New Zealand was set up.
Near by, but opening upon the Waitangi rather than on the bay, is a
deep, dark glen. At the bottom of it, and filling the lower ground, are
the wharès and cultivations of a good-sized Maori kainga. There are
some frame-houses, too, which show how civilized our brown fellow-
subjects are becoming. And from here we can row up the winding
Waitangi river to another point of interest.
Some miles above, the influx of the tides is stopped by high falls,
just as it also is in the Keri-keri river, close to the old station.
Waitangi Falls is the port for all the inland country on this side. There
is a young settlement here, and the place is remarkable for being
the spot where the famous treaty was signed. Moreover, the falls are
well worth looking at.
One of the most interesting stories relating to the Bay of Islands is
that of the first Maori war, which was waged around it from 1845 to
1847. It has been related often enough, and I can only find room for
some very brief details. Such as they are, they are mostly gathered
from the oral narrations of eye-witnesses, both English and Maori,
whose testimony I feel more inclined to believe than that of some
printed accounts I have seen.
Hone Heke was the leader of one of the sections into which the
great Ngapuhi tribe had split after the death of the celebrated Hongi
Hika, who expired March 5, 1828. Captain Hobson's friend, Tamati
Waka, was chief of another section; while Kawiti, another chief,
headed a third. These persons were then paramount over pretty
nearly the whole region lying between Mongonui and the Kaipara.
They had been among the confederate chiefs whom the British
Government recognized as independent in 1835; and their
signatures were, subsequently to that, attached to the Treaty of
Waitangi.
Shortly after the proclamation of New Zealand as a British
possession, Governor Hobson, seeing that Kororareka was unsuited
for a metropolis, removed the seat of government to the Waitemata,
and there commenced a settlement which is now the city of
Auckland. Order had been restored in the former place, but its
importance and its trade now fell away.
The Ngapuhi had some grievances to put up with. The trade of the
Bay was much lessened; import duties raised the price of
commodities; while the growing importance of Auckland gave
advantages to the neighbouring tribes, the Ngatitai, Ngapaoa,
Waikato, and Ngaterangi, which the Ngapuhi of the Bay of Islands
had formerly monopolized. It needed but little to foment the
discontent of a somewhat turbulent ruler such as Hone Heke.
In the year 1844 this chief, visiting Kororareka, and probably venting
his dissatisfaction at the new regime pretty loudly, was incited by
certain of the bad characters, who had previously had it all their own
way in the place. They taunted him with having become the slave of
a woman, showing him the flag, and explaining that it meant his
slavery to Queen Victoria, together with all Maoris. In such a way
they proceeded to work up his feelings, probably without other
intention than to take a rise out of the Maori's misconception of the
matter.
Hone Heke took the thing seriously. He said that he did not consider
himself subject to any one. He was an independent chief, merely in
alliance with the British, and had signed the Treaty of Waitangi in
expectation of receiving certain rewards thereby, which it appeared
had been changed into penalties. As for the flag, if that was an
emblem of slavery, a Pakeha fetish, or an insult to Maoridom, it was
clear that it ought to be removed, and he was the man to do it.
Accordingly, he and his followers then present, marched at once up
the hill above Kororareka, and cut down the flagstaff that had been
set up there. Then they withdrew quietly enough. The settlers were
much disconcerted, having no means of coercing Heke, and not
knowing to what this might lead. However, they set the flagstaff up
again.
Hone Heke appeared once more with his band, this time in fierce
anger. They cut down the restored flagstaff, and either threw it into
the sea, or burnt it, or carried it off. Heke also threatened to destroy
Kororareka if any attempt was made to fly the British flag again.
H.M.S. Hazard now came up from Auckland, where considerable
excitement agitated the young settlement. The flagstaff was again
restored, and, this time, a small block-house was built round it,
which was garrisoned by half a dozen soldiers.
Now, Hongi Hika, previous to his death, had enjoined a certain policy
upon his successors. He had told them never to make war upon such
Pakeha as came to preach, to farm, or to trade. These were not to
be plundered or maltreated in any way. They were friends whose
presence could only tend to the advantage of the Maori. But the
English sovereign kept certain people whose only business was to
fight. They might be known by the red coats they wore, and by
having stiff necks with a collar round them. "Kill these wherever you
see them," said Hongi; "or they will kill you."
So Hone Heke sent an ultimatum into Kororareka, to the effect that,
on a certain specified day, he should burn the town, cut down the
flagstaff, and kill the soldiers. The attack was fixed for night, and it
came with exact punctuality. Most of the inhabitants took refuge on
board the Hazard and some other craft then lying in the harbour;
while these prepared to guard the beach from a canoe attack.
Captain Robertson of the Hazard, with some forty marines and blue-
jackets, aided also by a party of settlers, took up a position on the
landward side of the town.
Hone Heke's own mind seems to have principally been occupied with
the flagstaff. The main attack he left to Kawiti, who had joined him,
with five hundred men. Heke himself, with a chosen band, crept
round unperceived through the bush, and lay in wait near the top of
the flagstaff hill, in a little dingle, which is yet pointed out to visitors.
Here they lay for some hours, awaiting the signal of Kawiti's attack
upon the town below. While in this position, Heke kept his men quiet
by reading the Bible to them, expounding the Scriptures as he read;
for all these Ngapuhi, whether friends or foes, were professed
Christians at that period.
By-and-by, the sound of firing and shouting in the town, together
with the blazing of some of the houses, attracted the attention of
the soldiers in the little block-house round the flagstaff. Unsuspecting
any danger close at hand, they came out on to the hill, the better to
descry what was doing below. Then Heke's ambush sprang suddenly
up, and rushed between them and the open door of the block-
house, thus capturing it, and either killing or putting the startled
soldiers to flight instantaneously.
Meanwhile a furious battle was taking place in Kororareka. Captain
Robertson and his small force were outflanked and driven in upon
the town, fighting bravely and desperately. But the numbers of the
Maoris were too great for them to contend with, and Robertson, with
half his men, was killed, the rest escaping with difficulty to the ships.
Then the victorious assailants rushed upon the devoted settlement,
speedily joined by Heke's band on the opposite side. The stores and
houses were plundered and set on fire, and soon Kororareka was a
charred and smoking heap of ruins, only the two churches being left
absolutely untouched. This was the first engagement during the war,
and was a decided success for the rebels. The fall of Kororareka took
place March 11, 1845; Heke having first cut down the flagstaff in
July of the previous year.
The news reached Auckland a day or two later, and something like a
panic occurred there. The settlers were armed and enrolled at once,
and the place prepared for defence; for it was said that Heke and
Kawiti had determined to destroy that settlement as well. Had they
been able to march upon it then, it is possible that their attack could
not have been successfully withstood, so limited were means of
defence at that time.
But Tamati Waka, the stout-hearted friend of the British, led out his
section of the Ngapuhi at once, and took up arms against their
kinsmen under Heke. He prevented the rebels from leaving their
own districts, and thus saved Auckland, allowing time for
reinforcements to reach New Zealand, and so for the war to be
carried into Heke's own country. All through the campaign he did
efficient service on our behalf, contributing much to the final
establishment of peace.
Tamati Waka Nene, to give him his full name, had been a savage
cannibal warrior in the days of Hongi. On one occasion then he had
led a taua, or war-party, of the Ngapuhi far to the south of Hauraki
Gulf, destroying and literally "eating-up" a tribe in the Kati-kati
district. Subsequently, he embraced Christianity and civilization, but
it is evident that the old warrior spirit was strong in him to the last.
He was an extremely sagacious and intelligent politician, fully
comprehending the advantages that must accrue to his race from
British rule. He enjoyed a government pension for some years after
the war, and, when he died, a handsome monument was erected
over his remains in Kororareka churchyard. It stands not far from
where bullet and axe-marks in the old fence still show the spot
where Robertson fell.
When Heke found himself pledged to war, he sent intimations to all
the settlers living about Waimate, Keri-keri, and the north of the bay,
mostly missionary families. He said he had no quarrel with them,
and would protect their persons and property if they would trust
him. Some remained, and some took refuge in Auckland. Those who
stayed were never in any way molested; Heke kept his word to them
to the letter. But of those who fled he allowed his men to pillage the
farms and houses, by way of utu for not believing him.
As soon as the authorities were in a position to do so, a strong force
was sent into the Bay district, to operate in conjunction with Tamati
Waka's men in putting down the insurrection. Three engagements
were fought, resulting in advantage to the British. The rebels were
then besieged in the fortified pa of Ohaeawae, some twenty-five
miles inland. No artillery had been brought up, and the consequence
was that our troops were repulsed from before this pa again and
again, with severe loss. But the victory was too much for the rebels,
who suffered considerably themselves, and ran short of ammunition.
One night they silently evacuated the place, which was entered next
day by the British, and afterwards destroyed. Very similar
experiences followed shortly after at the pa of Okaehau.
Finally, in 1847, the insurgents were beleaguered in the pa of
Ruapekapeka, situated near the Waitari river. This they considered
impregnable, and it was indeed magnificently defended with
earthworks and palisades, arranged in such a manner as to excite
the wonder and admiration of engineers. A model of it was
subsequently made and sent home.
Some artillery had now been got up, with immense labour and
difficulty owing to the rugged character of the ground. These guns
were brought to bear upon the pa. But the Maoris had hung
quantities of loose flax over the palisades, which fell into place again
after the passage of a ball, and hid the breach it had made. Thus
the besiegers could not tell what they had effected, while the
defenders were enabled to repair the gaps unseen.
The pa was taken in rather a curious way. It happened that no
engagement had been fought on a Sunday, and the rebels, being
earnest Christians, and having—as Maoris have to this day—a
respect for the Sabbath, more exaggerated than that of the Scots
even, concluded that an armistice was a matter of course. When
Sunday morning came, they went out of the pa at the back to hold
worship after their manner. Tamati Waka's men, perceiving this,
conquered their own Sabbatical leanings, and, finding an opening,
rushed into the pa, followed by the British troops. The disconcerted
worshippers attempted to retake the pa, but were speedily routed
and scattered.
This event terminated the war. The insurgents were broken and
disheartened, their numbers reduced, their strongholds captured,
and their ammunition exhausted. They soon all laid down arms and
sued for pardon. Ever since, all the sections of the rebel tribe have
been perfectly peaceable, and take pride in the epithet earned by
Tamati Waka's force, "the loyal Ngapuhi," which is now to be applied
to the entire tribe.
This first Maori war presents some considerable contrasts to those
which had afterwards to be waged with other tribes, in Wellington,
Nelson, Taranaki, and Waikato. It was characterized by humanity on
both sides, and by an approach to the usages of conflict between
civilized peoples. The Ngapuhi had had the missionaries among
them longer than any other tribe, and had benefited greatly from
their teaching. Some barbarity they still showed, perhaps, but their
general conduct was widely different from what it would have been
twenty or thirty years before.
At the attack on Kororareka, a woman and several other fugitives
were made prisoners. They were treated kindly, and next day Hone
Heke sent them on board the ships in the harbour. A settler informed
me that he was once conveying wounded soldiers in a bullock-dray,
from the front at Ohaeawae down to the bay. On the road, a party of
Heke's men suddenly appeared out of the bush and surrounded
them. They were quite friendly, however, grounding their arms for a
sociable smoke and chat. They counted the wounded soldiers, giving
them fruit, and assisting at the passage of a dangerous creek. At
parting, they merely reminded the soldiers that if they came back
they would be killed, as they, the rebels, intended to kill or drive
away all the red-coats.
Waimate is the most important centre to the north of the Bay of
Islands; it lies about ten miles inland from Waitangi Falls. The roads
from Waitangi to Waimate, to Ohaeawae and Okaehau, are really
good. A buggy might even be driven along them with perfect ease.
Only, between Waitangi and Waimate there is a formidable creek,
the bridge over which is continually being swept away by floods.
Then one must cross by a difficult and shifting ford, and, if the creek
be full, it may be necessary to swim one's horse over, as once
happened to me, I remember.
On proceeding inland in this district, the ground loses its
ruggedness. It is not flat, exactly, but it is only gently undulating,
and not so violently broken as in most other parts of the north. The
soil is volcanic, the ground mostly open, and much of it splendidly
fertile, like that of the Bay of Naples. There are extinct craters and
old lava streams here and there; but there has been no evidence of
activity in them within the memory of man or of Maori tradition. The
district of active volcanoes, solfataras, hot-springs, geysers, and so
on, lies beyond the limits of the Land of the Kauri altogether.
Waimate was settled by the early missionaries. It includes lands held
by the representatives of three parent Societies. It is a large village,
composed of residences that may well be termed villas. Nearly all
the inhabitants belong to missionary families, and they form a sort of
little aristocracy here to themselves. There is a kind of old-world air
about the place: it seems to be standing still while the rest of New
Zealand is progressing fast and furiously around it. The people are
the soul of kindly hospitality, but they are a little exclusive from the
very fact of having lived here all their lives, and of having seen but
little of the outside world. For the same reason, and because new
settlers do not come up, owing to the land not being readily
obtainable, they are somewhat averse from movement, and inclined
to jog along in a settled groove.
I know of no place in the colony that presents such a striking
resemblance to a quiet, stick-in-the-mud, rural locality of the old
country. The Europeans are the gentry, and the Maoris round might
pose as the rest of the population.
There is a handsome church at Waimate, but there is no hotel,
though there are very good ones at Waitangi and Ohaeawae. There
are yards and pens to accommodate a horse, cattle, sheep, and pig-
market, which is held here at regular intervals. Waimate is a great
farming centre, some of the lands about it having been under the
plough for fifty years; still, it is a trifle backward in its modes, the
farmers not striving to make a pile, but being content to keep
themselves in competence. This may also be esteemed a central
point of modern Maori civilization.
There are a number of young families growing up at Waimate, amid
the softening influences of its homely refinement. Among them are
an unusual number of young ladies. Whatever may be the faults of
the place, with regard to its lack of energy and backwardness in
farming industry, it redeems them all by the abundant crop of first-
class British rosebuds it is raising for the delectation of hungry
bachelors.
Well do I remember, once, Dandy Jack rejoining a party of us, who
were up at Kawa-kawa on business. There was such a look of
beatified content upon his face, that we all exclaimed at it. He told
us he had been stopping at a house where there were ten lovely
girls, between the ages of fourteen and twenty-six. He had come to
bring us an invitation to go and visit there, too. Within half an hour
every horse was saddled, and every individual of us, having
completed his most killing toilette, was on the road to this bush-
nursery of Beauty!
Six or eight miles from Waimate we come to Ohaeawae, a place of
very great interest. The most conspicuous object is the beautiful
church, whose tall spire mounts from a rising ground in the centre of
the settlement. That church occupies the very site of the old pa,
and, what is more, it was built entirely at the expense, and partly by
the actual labour, of the very Maoris who fought the British here in
Heke's war.
With the exception of the principal store and hotel, and possibly of
one or two other houses near, Ohaeawae is a Maori town. A few
miles further along the road is yet another straggling settlement,
whose name I forget, and all is mainly Maori. These natives here are
even further ahead than we are in the Kaipara. They have good
frame-houses in all styles of carpentering; they have pastures
fattening their flocks and herds and droves; they have their ploughs
and agricultural machinery; and fields of wheat, potatoes, maize,
and what not. They use the telegraph and the post-office for
business or pleasure; they have their own schools, police, and
handicrafts of various kinds. In short, as a body, they seem quite as
much civilized as if they were white instead of brown. I suppose
that, round Ohaeawae and Okaehau and Waimate, the Maori may be
seen in the highest state of advancement to which he has anywhere
attained. But more of him anon.
Between these settlements and the Hokianga waters, the roads
become more inchoate again, and one passes through wild land,
which gets more and more covered with bush as one proceeds.
Hokianga, though it has its history of the early days, in common with
the Bay, is far behind it in progress. In fact, Hokianga is a long way
less forward than the Kaipara, and there are very few settlers in it.
Its principal features are steep and lofty ranges, and a rich
luxuriance of forest. The scenery is magnificent.
Winding along down the Waima or Taheke rivers, no eye so dull but
must admire the glorious woodland beauties around. Soft green
willows sweep the waters, and hide the banks below their foliage like
some natural jalousie. Above is a bewildering thicket of beauty.
Ferns, fern-trees, fern-creepers, every variety of frond, mingled with
hanging masses of white star-flower, pohutukawa trees one blaze of
crimson, trees and shrubs of a hundred varieties. And above tower
lofty ranges, covered to the topmost summit with dense
impenetrable woods, sparkling and gleaming with a thousand tints in
the brilliant sunshine and clear atmosphere.
As the boat travels down the stream, teal and wild-duck splash and
glide and scuttle and fly before it. The wild birds of the bush, that
some will have it are becoming extinct, are here to be seen in
greater numbers than anywhere else I know of. Those rare green
and scarlet parrots tumble and shriek on the summits of the trees,
while the large purple sultana-ducks peep forth occasionally.
Here and there some vista opens, disclosing a little Maori kainga, or
the house and clearing of a settler, who thinks more, perhaps, of
living amidst such natural beauty than of making a prosaic pile in
any less attractive spot. I love the Kaipara, and I am in honour
bound to deem Te Puke Tapu on the Arapaoa the acme and
perfection of woodland glory—but, in the Hokianga, splendid and
magnificent, one forgets other places.
Take that gorge of the main estuary, for example, just above
Wirineki, where the Iwi Rua raises its wild peaks, and sends its
tremendous shoulders with their ridgy backs and dark ravines, all
clothed in overwhelming wealth of forest, rushing down to the blue
water. What can one say but that it is simply sublime! As Wales is to
Scotland, so is this to the Yosemite.
There is but little industry in Hokianga. There are some sawmills, but
they are comparatively small, and do not add very largely to our
timber trade. There are some farms, but they, too, are small and
doing little. There are schools, but their work is limited.
The principal settlement is Hurd's Point, to which place a steamer
comes from the Manukau once a fortnight. It is claimed here that
this is actually the oldest settlement in New Zealand, prior even to
Kororareka. A man named Hurd came here early in the century, and
established a store for trade with the Maoris; sailing vessels from
Sydney occasionally communicating with him.
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