Game Theory: Study of Strategic Decision-Making
1.0 INTRODUCTION
Game theory is a study of strategic decision-making. More formally, it is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers". An alternative term given to the theory is interactive decision theory. Game theory is mainly used in economics, political science, and psychology, as well as logic and biology. In game theory, the Nash equilibrium is a solution concept of a non-cooperative game involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only their own strategy unilaterally. If each player has chosen a strategy and no player can benefit by changing strategies while the other players keep theirs unchanged, then the current set of strategy choices and the corresponding payoffs constitute Nash equilibrium.
1.1 John Forbes Nash Jr.
John Forbes Nash, Jr. is an American mathematician who was born on June 13, 1928. His works in game theory, differential geometry, and partial differential equations have provided insight into the forces that govern chance and events inside complex systems in daily life. His theories are used in market economics, computing, evolutionary biology, artificial intelligence, accounting, politics and military theory. John Forbes Nash Jr. Nash attended Carnegie Institute of Technology with a full scholarship, the George Westinghouse Scholarship and initially majored in Chemical Engineering. He switched to Chemistry, and eventually to Mathematics. After graduating in 1948 with bachelor of science and master of science degrees in mathematics, he accepted a scholarship to Princeton University where he pursued his graduate studies in Mathematics under the John S. Kennedy fellowship Nash earned a doctorate in 1950 with a 28-page dissertation on non-cooperative games. The thesis, which was written under the supervision of Albert W. Tucker, contained
Game theory is a study of strategic decision-making. More formally, it is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers". An alternative term given to the theory is interactive decision theory. Game theory is mainly used in economics, political science, and psychology, as well as logic and biology. In game theory, the Nash equilibrium is a solution concept of a non-cooperative game involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only their own strategy unilaterally. If each player has chosen a strategy and no player can benefit by changing strategies while the other players keep theirs unchanged, then the current set of strategy choices and the corresponding payoffs constitute Nash equilibrium.
1.1 John Forbes Nash Jr.
John Forbes Nash, Jr. is an American mathematician who was born on June 13, 1928. His works in game theory, differential geometry, and partial differential equations have provided insight into the forces that govern chance and events inside complex systems in daily life. His theories are used in market economics, computing, evolutionary biology, artificial intelligence, accounting, politics and military theory. John Forbes Nash Jr. Nash attended Carnegie Institute of Technology with a full scholarship, the George Westinghouse Scholarship and initially majored in Chemical Engineering. He switched to Chemistry, and eventually to Mathematics. After graduating in 1948 with bachelor of science and master of science degrees in mathematics, he accepted a scholarship to Princeton University where he pursued his graduate studies in Mathematics under the John S. Kennedy fellowship Nash earned a doctorate in 1950 with a 28-page dissertation on non-cooperative games. The thesis, which was written under the supervision of Albert W. Tucker, contained