Game theory


Game theory is nothing but the study of calculated decision making. Game theory is mainly used in economics, political science, and psychology. Modern game theory started with the idea of mixed strategy balance in two persons zero-sum games. Zero-sum games mean one person’s gains exactly equal net losses of other participants. The games defined in game theory are well-defined mathematical objects. A game contains a set of players, a set of moves or strategies and a specification of payoffs for each combination of strategies. The extensive and normal forms are used to define non-cooperative games. The extensive forms can be used to formalize the games with a time sequencing of moves. Games in this form can be played in the form of trees. Each vertex denotes a point of choice for a player. The player is specified by a number listed by the vertex. The lines out of the vertex indicate a possible action of that player. At the bottom, the payoffs are specified.

The extensive form can be described as a multi-player generalization of a decision tree. The extensive form can capture the games with imperfect information. The normal form is otherwise known as strategic form. The normal form is represented generally by a matrix which shows the players, strategies and payoffs. When a game is represented in normal form, it is assumed that each player acts without knowing the actions of the other. Game theory can be used to study a wide variety of human and animal behaviors. It was originally developed in economics to understand a large collection of economic behaviors.

Game theory has now been applied to political, sociological and psychological behaviors. Co-operative game is a type of game if the players are able to form binding commitments. In non-cooperative games, communication is not allowed. Hybrid games contain both cooperative and non-cooperative games. The other type of games include cooperative or non-operative games, symmetric and asymmetric, simultaneous and sequential, perfect and imperfect information, combinatorial games, infinitely long games, discrete games, continous games, differential games, many player games and metagames etc. Such games are used extensively in computations. The game theories are used in computer science and multi agent systems. They are also used in algorithms as well. The advent of technology has played its part significantly in these game theories.

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