Game theory is the study of strategic interaction between participants where each person's payoff depends on the decisions of others. There are 5 classifications of games: simultaneous vs sequential, perfect vs imperfect information, complete vs incomplete information, symmetric vs asymmetric, and zero-sum games. The normal form represents a game as a table with strategies and payoffs, while the extensive form uses a tree diagram. John Nash made major contributions to game theory through establishing its mathematical principles and developing the Nash equilibrium, which describes strategies where each is the best response to others' strategies.
Game theory is the study of strategic interaction between participants where each person's payoff depends on the decisions of others. There are 5 classifications of games: simultaneous vs sequential, perfect vs imperfect information, complete vs incomplete information, symmetric vs asymmetric, and zero-sum games. The normal form represents a game as a table with strategies and payoffs, while the extensive form uses a tree diagram. John Nash made major contributions to game theory through establishing its mathematical principles and developing the Nash equilibrium, which describes strategies where each is the best response to others' strategies.
Game theory is the study of strategic interaction between participants where each person's payoff depends on the decisions of others. There are 5 classifications of games: simultaneous vs sequential, perfect vs imperfect information, complete vs incomplete information, symmetric vs asymmetric, and zero-sum games. The normal form represents a game as a table with strategies and payoffs, while the extensive form uses a tree diagram. John Nash made major contributions to game theory through establishing its mathematical principles and developing the Nash equilibrium, which describes strategies where each is the best response to others' strategies.
Game theory is the study of strategic interaction between participants where each person's payoff depends on the decisions of others. There are 5 classifications of games: simultaneous vs sequential, perfect vs imperfect information, complete vs incomplete information, symmetric vs asymmetric, and zero-sum games. The normal form represents a game as a table with strategies and payoffs, while the extensive form uses a tree diagram. John Nash made major contributions to game theory through establishing its mathematical principles and developing the Nash equilibrium, which describes strategies where each is the best response to others' strategies.
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1. What is game theory?
Game theory – study of strategic interaction between participants in a situation that contain a set of rules and a set of outcomes. In this theory, game is defined as any interaction between two or more people in which each person’s payoff is affected by the decisions made by others.
2. What are the different classifications of games?
There are 5 classifications of games. Games can be classified to the following: a. Simultaneous vs sequential games - In a simultaneous game, every player has only one move. These moves are done simultaneously by the players. - In a sequential game, no two players may move at the same time. In this type of game, one player chooses their course of action before the other player choose theirs.
b. Perfect vs imperfect-information games
- A sequential game can be considered as a perfect-information kind of game where each player is perfectly informed of all the moves done by the other players and all random moves made so far. - A sequential game can be considered as an imperfect-information kind of game where each player has imperfect information of all the possible moves that his competition may do.
c. Complete vs incomplete-information games
- A complete-information game means that all players of the game know the structure of the game, the sequence of the players, all of the possible moves that all of the players may make, and all of its possible outcomes. - An incomplete-information game means that in that game, the players do not have common knowledge of the game being played. They may have no common knowledge of the payoffs, the possible moves, or more.
d. Symmetric vs Asymmetric games
- For a game to be considered as symmetric, all the strategies used by the players are the same. The decisions remain the same in symmetric games. - For a game to be asymmetric, the strategies adopted by the players vary from each other. One strategy that may benefit a player may not benefit other the other. e. Zero-sum game - For a zero-sum game, the sum of the payoffs for every possible outcomes of this game are equal to 0. In this game, one may win if he has a positive outcome while the other players have a negative outcome.
3. What is the difference between normal form and extensive form of a game? In the normal form of a game, the game is shown by a table of numbers, with its strategies put along the margins of the table and the payoffs for each contestant are listed in the cells of the table. For the extensive form of a game, the game is represented as a tree diagram where the strategies are shown as a branch point.
4. Who is John Nash? What is his contribution to the field of game theory? John Nash is an American mathematician who was awarded the 1994 Nobel Prize for Economics for his work in the field of mathematics, especially in the mathematics of game theory. He was the one that established the mathematical principles of game theory. This major contribution in mathematics is known as the Nash equilibrium. Nash equilibrium is the list of strategies where each player has one strategy, wherein that strategy is the best answer to the other strategies of the other players.
