Game Theory

Game theory depends on strategy (your own strategy combined with the strategy of others). It is a branch of applied mathematics. Game theory is used in biology, computer science, engineering, international relations, philosophy, and especially economics.

"What economists call game theory psychologists call the theory of social situations, which is an accurate description of what game theory is about. Although game theory is relevant to parlor games such as poker or bridge, most research in game theory focuses on how groups of people interact (Levine, David K.)"

One common game in game theory is Paper, Scissors, Rock. In this game, opponents use their own strategy and skill to make decisions based on their interpretation of the other opponents' strategy. Many people may be familiar with the game the Prisoner's Dilemma. For a diagram of a similar game called the Pride Game, along with a detailed explanation, please see Figure 1.3.

Game theory was explored in the popular movie War Games from 1983. In this movie, the character played by Matthew Broderick learns that in the game of Global Thermonuclear War, there are no winners. War Games is not the only movie based on Game Theory. Others include the following: The Hunt for Red October, Dr. Strangelove or How I Learned to Quit Worrying and Love the Bomb, and Memento.

In 1944, John von Neumann and Oskar Morgenstern published the book Theory of Games and Economic Behavior. There had been some development of game theory prior to this book, but research was continued extensively in the 1950s. In the 1970s, game theory was applied to biology as well.

The different types of games in game theory are: extensive form game, normal form game, cooperative game/characteristic function form, and partition function form. Game theory has been used in economics and social sciences. Games can also be broken down into the following categories: cooperative or non-cooperative, symmetric and asymmetric, zero-sum and non-zero-sum, simultaneous and sequential, perfect information and imperfect information, infinitely long games, discrete and continuous games, one-player and many-player games, and Metagames.

Closely related to game theory are decision theory (one person games), general equilibrium theory (dealing with trade and production), and mechanism design theory (dealing with the consequences of different rules).

It is exciting that game theory is being used today in developing artificial intelligence. Game theory, around since the days of Plato, is still being developed and researched along with the other branches of applied mathematics.