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Game Theory (Applications (Market, Networking, Politics, Sports,…
Game Theory
Applications
Market
Networking
Politics
Sports
Mathematics
Computer Science
Biology
Law
Philosophy
Military Strategy
Introduction
Computational study of human behaviour
Decision makers interact with each other in a game
Concerned about how people behave in strategic situations
Happiness of each participant depends upon the decisions made by everyone
Key elements
Players
Those who has effect on your earnings in the game
The participants of the game
Strategies
Actions available to each player in a game
Playoffs
Numbers associated with each outcome
Reflects the interest of each players
Information
What each player knows about the game
Rationality
How each player think in the game
Concept of different situations
Dominant strategy
If player's best strategy does not depend upon what other players do
No need for "what if..?" thinking
Does not always lead to the best outcome
Strategies are taken without the full knowledge of what other players will do
Prisoner's dilemma
Difficult to cooperate even when it is the best interest of both parties
Nash Equilibrium
Situation in which none of the players have dominant strategies and each player makes his or her best move
Maximizes the playoff of the player
Tacit collusion
Where forms undertake actions which will help to minimize a competitive response
Preventing price-cutting in each other's market
Whistle blowing
When one or more agents in a collusive agreement report it to the authorities
Zero sum game
An economic transaction in which whatever is gained by one party must by lost by other party