Game Theory – A Very Useful Concept


Game Theory – A Very Useful Concept

A game is a well-organized, logically-arranged form of play, sometimes used as an academic tool, and at times used purely for entertainment. Unlike work, which can be adapted from formal rules, games are entirely different: they are entirely different entities with their own purposes and features. However, games are frequently used as teaching tools, for improving analytical and logic skills in students. Also used in some aspects of education, a game helps in the learning process by fostering interest and interaction among participants. Games are much different from choreography, which is usually done for remuneration, and in comparison to art, which is typically more an expressive expression of artistic or aesthetic elements.

To play games, one must stick to the rules, which should be strictly adhered to without deviating from them. Usually, such games do not have very complex rules, since simple rules can be followed easily. These rules may include basic rules like ‘you are to avoid touching the other players’. The rules are known to the participant; he can either refer to them verbally or write them down on pieces of paper, provided that the game has been designed to permit such actions. It is the complexity of the rules which restrict the participant to follow them, though he may choose to ignore them if he wants to.

On the other hand, a game has no player, thus its outcome cannot be measured or predicted. However, it is the ability of a player to coordinate with others to effect a foreseeable outcome of a game. In order to coordinate with other players, the player needs to know a little of what they are doing and how they are likely to act in certain circumstances. Thus, he uses mathematics, probability, statistics, etc, in order to analyze the possible outcomes of the game, coming to a knowledge of the equilibrium he finds himself to be in. This knowledge may be expressed in numerical form, graphical form, etc., though the pure form may also be known intuitively.

The most familiar of all such games is the prisoner and dictator game. In the prisoner game, two players are placed in front of a board, each of which has a set of prisoners. The object of the game is for the player who has more pairs (do not count other player’s pairs), to move his prisoners to the opposite corners of the board. The player who has fewer pairs must do the same, except that she must move her prisoners east. If a player ends up with nothing, i.e. he has no pairs, then the result is a draw.

In the dictator game, the player is the leader of the pairings of people. Every other player is forced to obey him. This is also a prisoner and dictator game, but there is one slight difference between it and the prisoner game. In the former, the leader is required to stick to the same pairings all the time, whereas in the latter the opposite is true. For instance, if a pair is jumbled with one person in jail and another out, then the out prisoner cannot be moved unless that person leaves the jail. In this way, these games are classified under the same game theory.

There are many different game theory examples. Two such examples are those of economic models and decision trees. In economic models, two players can decide to go about their lives in different ways depending on the current state of the economy. Each of them is then assigned an economic value, where that value varies with the amount of trade that takes place between them. This is the outcome of the model assumptions, which are equilibrium and exogenous prices.