As a result, a player cannot simply maximize their own objective function without regard to the other players’ decisions. In a non-trivial game, a player’s objective function is usually influenced by the choices of at least one other player, if not all of them. An introduction to non-cooperative game theory
Two of the most popular games that come under game theory include cooperative and non-cooperative games. Some of the prominent factors that influence the type of games developed include the number of participants, symmetry, and player collaboration. And having a solid understanding of game theory strategies plays a key role in enhancing one’s reasoning and decision-making skills in today’s highly complex and competitive world.ĭifferent types of games are used in game theory to analyze different types of situations. And the twenty-first century is set to be a platinum era, as it will unravel the various theorems and applications of static and dynamic games.įrom business, finance, and economics to political science, psychology, biology, military, and more, game theory can be applied to various industries. While it is unclear which exact event or writing was the catalyst for game-theoretic thinking or decision-making, it is undeniable that the second half of the twentieth century was a golden era for game theory. Although von Neumann and Morgenstern’s 1944 work is widely considered to be the origin of the scientific approach to game theory, game-theoretic concepts and certain isolated significant discoveries also came from earlier years. This clearly demonstrates the relevance of game theory in modern-day analysis and decision-making. Since 1970, the Nobel Prize in Economic Sciences has been awarded to a total of 12 prominent economists and scientists for their contributions to game theory, with John Harsanyi, John Nash, and Reinhard Selten receiving the first such honor in 1994 for their “pioneering analysis of equilibria in the theory of non-cooperative games.” Although ‘The Theory of Games and Economic Behavior’ (1944) by John von Neumann and Oskar Morgenstern is often credited with launching the field, game theory has evolved significantly since then, both in terms of the number of theoretical findings and the extent and variety of applications.
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