Game theory is a mathematical model of conflicts and cooperation. It is used in the field of political science, economics, logic, computer science, psychology, and biology. Initially, it was based on the concept that one personâ€™s gain will result in the other personâ€™s loss. But, with time, the concept extended and was applied in various areas.
Concept of Nash Equilibrium used in game theory
When you refer to game theory homework answers, you will be taught the concept of Nash equilibrium which is used in game theory to find out the optimal outcome of the game. This condition is used when none of the players have the desire to continue with the chosen strategy after he/she gets to know about the opponentâ€™s strategy. According to this equilibrium theory, if the strategies of the competitors remain constant, then the changing strategies on the part of the other players will result in no incremental benefit.
Game theory in business scenario
Recently, the application of game theory in business has increased multi-fold. Game theory homework answers will help you in studying the human conflict and cooperation in an organization. It is considered as a strategy where decision-making is concerned. Competitive and independent actors participate in the making and implementation of strategies. Game theory was brought into the scenario by mathematicians John von Neumann and John Nash and economist Oskar Morgenstern.
Categories of game types in game theory
Let us learn about categories of game types with the help of experts providing game theory homework answers.
- Cooperative and non-cooperative:
If the players are successful in forming business commitments externally through contract laws, it is termed as cooperative game. If the players are not able to form alliances, it is called a non-cooperative game. The game theory used here focuses on how coalitions are formed, the actions of the group and the results of the payoff.
- Symmetric and asymmetric:
A symmetric game is defined as a situation where a particular strategy depends on the other strategies used in playing the game. Without changing the strategic payoff, if the identities of the players can be changed, it is called a symmetric game. Examples of symmetric games are prisonerâ€™s dilemma and stage hunt. But if identical strategy sets are not present for both the players, it is called an asymmetric game.
- Zero sum and non-zero sum:
Zero sum games are derived from constant sum games where the choices offered to the players does not change the available resources. In zero sum games, all the combination of the strategies adds to zero. Examples are poker and matching pennies. In non- zero sum game, it does not mean that gain of one player will result in loss of the other one.
- Simultaneous and sequential:
In simultaneous games, both the players move simultaneously. In sequential games, the later players do have knowledge about the earlier proceedings of the game. The difference between the two games lies in the form which is used to represent both the games.
- Perfect and imperfect information:
When the player knows about the move made by the other players, it is called a perfect information game. Ultimatum game, centipede game, chess, and cards are perfect information games. Card games such as poker and contract bridge are imperfect information games.
- Combinatorial games:
The games which offer many multiple moves of finding an optimal strategy are called combinatorial games. There has been a use of artificial intelligence in studying the structure of combinatorial games such as chess and alpha-beta pruning.
- Infinitely long games:
Games which carry on using infinitely many moves are studied by economists and statisticians. The focus of the study of this game is to find a perfect winning strategy by using the concept of set theory.
- Discreet and continuous:
Discreet games have a definite number of players and moves and end with a definite outcome. Continuous games allow players to choose a particular strategy from a set of continuous strategy.
- Many player games and population games:
Games which are played with a finite number of players are called n-person games. Population games are studied by decision makers, where a particular decision can change the decision of all the individuals in the population. It is used in the subject of biology to study evolution.
- Pooling games
Pooling games connect the optimal choice used in a play and the emergence of upcoming payoff table and predict the variance over the period of time.
How does game theory affect economics and business?
The experts providing game theory homework answers will teach you how to use game theory in the subject of economics and business. Significant and crucial problems in the field of economics could be solved by using the mathematical model of game theory.
For example, neoclassical economists were not able to understand the anticipation of entrepreneurs and hence were not able to handle the imperfect competition. Game theory helped in this condition and turned the steady state equilibrium towards the market processes.
When implementation the game theory, the decision makers should consider the reactions of those people, who will affect by the decisions. In terms of business, this means that economists must anticipate the reactions of rivals, employees, investors, and customers and prepare accordingly.
As we can see, there are many concepts of game theory which need to be mastered. For this, students can avail online homework help in the form of game theory homework answers. Clarify your doubts and reach the zenith of success.