Game Theory Research Paper Example | Topics and Well Written Essays - 3000 words

Game Theory - Research Paper Example Game theory is useful for many purposes. First, one must ask, what is game theory? â€Å"Game theory uses mathematical tools to study situations, called games, involving both conflict and cooperation. Its study was greatly stimulated by the publication in 1944 of the monumental Theory of Games and Economic Behavior by John von Neumann and Oskar Morgenstern†¦Ã¢â‚¬  Before we get into the details of game theory, it is first important to make clear a few definitions. A â€Å"game† consists of a competition between two or more parties, although in decision theory, it is possible to have a one-person game. A â€Å"player† is a party competing in said game. The state is the information known by a player at a certain point during the game. A strategy is a rule which defines how the player will play the game. The payoff is the value assigned to the result of play, i.e., the outcome—the results of which might be distinct for every player. The main concept behind game theory is that, in a game, each player is trying to maximize their resultant payoff. â€Å"The game theoretician is concerned with the mathematical model and with conclusions he can draw from assumptions (in particular about utilities represented by payoffs) that stay put, not with assumptions that capture the entire spectrum of human conflict behavior.† ... with assumptions that capture the entire spectrum of human conflict behavior.†2 At each stage of a game, a wide array of moves is presented to each player. Then, they each decide the move that would be the best choice, to the best of their knowledge, in order to achieve the highest payoff. There are always rules for selecting the proper moves at any point in a game which can be figured out before a game is played—which is called a strategy. Subsequently, it also follows that a game which is very complex, involving many decisions at varying stages can be represented by the strategy of each player. But, the result of any particular strategy really depends on the other players’ moves. Someone on the defensive might be able to calculate the lowest payoff or end result for each strategy (presuming that the particular strategy is somewhat of a secret), selecting the strategy that would result in the best (or highest) payoff. Basically, it is worth noting that one should account for the fact that many players will try to act as rationally as possible, hopefully making corollary decisions which would be deemed ration. To such an end, the main goal is to find a certain set of strategies (one per player) that maximizes each player’s payoff. However, such a selection of strategies should probably be rejected if it is not equilibrium. Equilibrium is basically reached when none of the players can attain a higher payoff by way of utilizing a different strategy, given the decisive actions of the other players. The model which has thus far been described is pretty abstract, although, technically speaking, this theory can be applied to a quite huge range of scenarios—and could be thusly applied to warfare, business, sports, or even politics. Truly, the possible uses of game