The search algorithms explored in the previous assignment work great when you know exactly the results of your actions. Unfortunately, the real world is not so predictable. One of the key aspects of an effective AI is the ability to reason in the face of uncertainty.

Markov decision processes (MDPs) can be used to formalize uncertain situations. In this homework, you will implement algorithms to find the optimal policy in these situations. You will then formalize a modified version of Blackjack as an MDP, and apply your algorithm to find the optimal policy.

Problem 1: Value Iteration

In this problem, you will perform the value iteration updates manually on a very basic game just to solidify your intuitions about solving MDPs. The set of possible states in this game is $\mathcal{S} = \{-2, -1, 0, +1, +2\}$ and the set of possible actions is $\mathcal{A} = \{a_1, a_2\}$. The initial state is $0$ and there are two terminal states, $-2$ and $+2$. Recall that the transition function $\mathcal{T}: \mathcal{S} \times \mathcal{A} \rightarrow \Delta(\mathcal{S})$ encodes the probability of transitioning to a next state $s'$ after being in state $s$ and taking action $a$ as $\mathcal{T}(s'|s,a)$. In this MDP, the transition dynamics are given as follows:

$\forall i \in \{-1, 0, 1\} \subset \mathcal{S}$,

• $\mathcal{T}(i-1 | i, a_1) = 0.8$ and $\mathcal{T}(i+1 | i, a_1) = 0.2$
• $\mathcal{T}(i-1 | i, a_2) = 0.7$ and $\mathcal{T}(i+1 | i, a_2) = 0.3$
Think of this MDP as a chain formed by states $\{-2, -1, 0, +1, +2\}$. In words, action $a_1$ has a 80% chance of moving the agent backwards in the chain and a 20% chance of moving the agent forward. Similarly, action $a_2$ has a 70% of sending the agent backwards and a 30% chance of moving the agent forward. We will use a discount factor $\gamma = 1$.
The reward function for this MDP is $\mathcal{R}(s,a,s') = \begin{cases} 20 & s' = -2 \\ 100 & s' = +2 \\ -5 & \text{otherwise} \end{cases}$

1. What is the value of $V^\star_i(s)$ for each state in $\mathcal{S}$ after each iteration $i = \{0, 1, 2\}$ of Value Iteration? Please write down the values from all iterations. Recall that $\forall s \in \mathcal{S}$, $V^\star_0(s) = 0$ and, for any terminal state $s_\text{terminal}$, $V^\star(s_\text{terminal}) = 0$. In words, all values are initialized to $0$ at iteration 0 and terminate states (for which the optimal policy is not defined) always have a value of $0$.
The $V^\star_i(s)$ of all 5 states after each iteration. In total, 15 values should be reported.
2. Using $V^\star_2(\cdot)$, what is the corresponding optimal policy $\pi^\star$ for all non-terminal states?
A few state action pairs to express the optimal policy.
Problem 2: Transforming MDPs

Equipped with an understanding of a basic algorithm for computing optimal value functions in MDPs, let's gain intuition about the dynamics of MDPs which either carry some special structure, or are defined with respect to a different MDP.

1. Suppose we have an MDP with states $\text{States}$ and a discount factor $\gamma < 1$, but we have an MDP solver that can only solve MDPs with discount factor of $1$. How can we leverage the MDP solver to solve the original MDP?

Let us define a new MDP with states $\text{States}' = \text{States} \cup \{ o \}$, where $o$ is a new state. Let's use the same actions ($\text{Actions}'(s) = \text{Actions}(s)$), but we need to keep the discount $\gamma' = 1$. Your job is to define new transition probabilities $T'(s, a, s')$ and rewards $\text{Reward}'(s, a, s')$ in terms of the old MDP such that the optimal values $V_\text{opt}(s)$ for all $s \in \text{States}$ are equal under the original MDP and the new MDP.

Hint: If you're not sure how to approach this problem, go back to Percy's notes from the first MDP lecture and read closely the slides on convergence, toward the end of the deck.

A few transition probabilities and reward functions written in mathematical expressions, followed by a short proof to show that the two optimal values are equal. Try to use the same symbols as the question.
Problem 3: Peeking Blackjack

Now that we have gotten a bit of practice with general-purpose MDP algorithms, let's use them to play (a modified version of) Blackjack. For this problem, you will be creating an MDP to describe states, actions, and rewards in this game. More specifically, after reading through the description of the state representation and actions of our Blackjack game below, you will implement the transition and reward function of the Blackjack MDP inside succAndProbReward().

For our version of Blackjack, the deck can contain an arbitrary collection of cards with different face values. At the start of the game, the deck contains the same number of each cards of each face value; we call this number the 'multiplicity'. For example, a standard deck of 52 cards would have face values $[1, 2, \ldots, 13]$ and multiplicity 4. You could also have a deck with face values $[1,5,20]$; if we used multiplicity 10 in this case, there would be 30 cards in total (10 each of 1s, 5s, and 20s). The deck is shuffled, meaning that each permutation of the cards is equally likely.

The game occurs in a sequence of rounds. In each round, the player has three actions available to her:

• $a_\text{take}$ - Take the next card from the top of the deck.
• $a_\text{peek}$ - Peek at the next card on the top of the deck.
• $a_\text{quit}$ - Stop taking any more cards.

In this problem, your state $s$ will be represented as a 3-element tuple:

(totalCardValueInHand, nextCardIndexIfPeeked, deckCardCounts)
As an example, assume the deck has card values $[1, 2, 3]$ with multiplicity 2, and the threshold is 4. Initially, the player has no cards, so her total is 0; this corresponds to state (0, None, (2, 2, 2)).
• For $a_\text{take}$, the three possible successor states (each with equal probability of $1/3$) are:
(1, None, (1, 2, 2))
(2, None, (2, 1, 2))
(3, None, (2, 2, 1))
Three successor states have equal probabilities because each face value had the same amount of cards in the deck. In other words, a random card that is available in the deck is drawn and its corresponding count in the deck is then decremented. Remember that succAndProbReward() will expect you return all three of the successor states shown above. Note that $\mathcal{R}(s, a_\text{take}, s') = 0, \forall s,s' \in \mathcal{S}$. Even though the agent now has a card in her hand for which she may receive a reward at the end of the game, the reward is not actually granted until the game ends (see termination conditions below).

• For $a_\text{peek}$, the three possible successor states are:
(0, 0, (2, 2, 2))
(0, 1, (2, 2, 2))
(0, 2, (2, 2, 2))
Note that it is not possible to peek twice in a row; if the player peeks twice in a row, then succAndProbReward() should return []. Additionally, $\mathcal{R}(s, a_\text{peek}, s') = -\text{peekCost}, \forall s,s' \in \mathcal{S}$. That is, the agent will receive an immediate reward of -peekCost for reaching any of these states.
Things to remember about the states after taking $a_\text{peek}$:
• From (0, 0, (2, 2, 2)), taking a card will lead to the state (1, None, (1, 2, 2)) deterministically (that is, with probability 1.0).
• The second element of the state tuple is not the face value of the card that will be drawn next, but the index into the deck (the third element of the state tuple) of the card that will be drawn next. In other words, the second element will always be between 0 and len(deckCardCounts)-1, inclusive.
• For $a_\text{quit}$, the resulting state will be (0, None, None). (Remember that setting the deck to None signifies the end of the game.)

The game continues until one of the following termination conditions becomes true:

• The player chooses $a_\text{quit}$, in which case her reward is the sum of the face values of the cards in her hand.
• The player chooses $a_\text{take}$ and "goes bust". This means that the sum of the face values of the cards in her hand is strictly greater than the threshold specified at the start of the game. If this happens, her reward is 0.
• The deck runs out of cards, in which case it is as if she selects $a_\text{quit}$, and she gets a reward which is the sum of the cards in her hand. Make sure that if you take the last card and go bust, then the reward becomes 0 not the sum of values of cards.

As another example with our deck of $[1,2,3]$ and multiplicity 1, let's say the player's current state is (3, None, (1, 1, 0)), and the threshold remains 4.
• For $a_\text{quit}$, the successor state will be (3, None, None).
• For $a_\text{take}$, the successor states are (3 + 1, None, (0, 1, 0)) or (3 + 2, None, None). Each has a probabiliy of $1/2$ since 2 cards remain in the deck. Note that in the second successor state, the deck is set to None to signify the game ended with a bust. You should also set the deck to None if the deck runs out of cards.
1. Implement the game of Blackjack as an MDP by filling out the succAndProbReward() function of class BlackjackMDP.
Problem 4: Learning to Play Blackjack

So far, we've seen how MDP algorithms can take an MDP which describes the full dynamics of the game and return an optimal policy. But suppose you go into a casino, and no one tells you the rewards or the transitions. We will see how reinforcement learning can allow you to play the game and learn its rules & strategy at the same time!

1. You will first implement a generic Q-learning algorithm QLearningAlgorithm, which is an instance of an RLAlgorithm. As discussed in class, reinforcement learning algorithms are capable of executing a policy while simultaneously improving that policy. Look in simulate(), in util.py to see how the RLAlgorithm will be used. In short, your QLearningAlgorithm will be run in a simulation of the MDP, and will alternately be asked for an action to perform in a given state (QLearningAlgorithm.getAction), and then be informed of the result of that action (QLearningAlgorithm.incorporateFeedback), so that it may learn better actions to perform in the future.

We are using Q-learning with function approximation, which means $\hat{Q}^\star(s, a) = \mathbb w \cdot \phi(s, a)$, where in code, $\mathbb w$ is self.weights, $\phi$ is the featureExtractor function, and $\hat{Q}^\star$ is self.getQ.

We have implemented QLearningAlgorithm.getAction as a simple $\epsilon$-greedy policy. Your job is to implement QLearningAlgorithm.incorporateFeedback(), which should take an $(s, a, r, s')$ tuple and update self.weights according to the standard Q-learning update.

2. Now let's apply Q-learning to an MDP and see how well it performs in comparison with value iteration. First, call simulate using your Q-learning code and the identityFeatureExtractor() on the MDP smallMDP (defined for you in submission.py), with 30000 trials. How does the Q-learning policy compare with a policy learned by value iteration (i.e., for how many states do they produce a different action)? (Don't forget to set the explorationProb of your Q-learning algorithm to 0 after learning the policy.) Now run simulate() on largeMDP, again with 30000 trials. How does the policy learned in this case compare to the policy learned by value iteration? What went wrong?
A short 5 to 6 sentences explanation regarding the above questions.
3. To address the problems explored in the previous exercise, let's incorporate some domain knowledge to improve generalization. This way, the algorithm can use what it has learned about some states to improve its prediction performance on other states. Implement blackjackFeatureExtractor as described in the code comments. Using this feature extractor, you should be able to get pretty close to the optimum values on the largeMDP. Note that the policies are not necessarily the same.
4. Sometimes, we might reasonably wonder how an optimal policy learned for one MDP might perform if applied to another MDP with similar structure but slightly different characteristics. For example, imagine that you created an MDP to choose an optimal strategy for playing "traditional" blackjack, with a standard card deck and a threshold of 21. You're living it up in Vegas every weekend, but the casinos get wise to your approach and decide to make a change to the game to disrupt your strategy: going forward, the threshold for the blackjack tables is 17 instead of 21. If you continued playing the modified game with your original policy, how well would you do? (This is just a hypothetical example; we won't look specifically at the blackjack game in this problem.)

To explore this scenario, let's take a brief look at how a policy learned using value iteration responds to a change in the rules of the MDP. For all subsequent parts, make sure to use 30,000 trials.

• First, run value iteration on the originalMDP (defined for you in submission.py) to compute an optimal policy for that MDP.
• Next, simulate your policy on newThresholdMDP (also defined for you in submission.py) by calling simulate with an instance of FixedRLAlgorithm that has been instantiated using the policy you computed with value iteration. What is the expected reward from this simulation? Hint: read the documentation (comments) for the simulate function in util.py, and look specifically at the format of the function's return value.
• Now try simulating Q-learning directly on newThresholdMDP with blackjackFeatureExtractor and the default exploration probability. What is your expected reward under the new Q-learning policy? Provide some explanation for how the rewards compare, and why they are different.
A short description of the rewards and explanation for the differences (around 4 to 6 sentences).