We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Assess the practical usefulness and the relevance of game theory in light of the demanding assumptions behind the concept of the - Essay Example

Comments (0) Cite this document
Summary
Nash equilibrium and game theory By: Student ID Email Address Tutor Institution Location Exercutive summary This paper gives the relevance and the applications of the concepts of game theory to the real world. The concept of game theory that the paper would focus on is the Nash equilibrium…
Download full paper
GRAB THE BEST PAPER
Assess the practical usefulness and the relevance of game theory in light of the demanding assumptions behind the concept of the
Read TextPreview

Extract of sample
"Assess the practical usefulness and the relevance of game theory in light of the demanding assumptions behind the concept of the"

Download file to see previous pages On e would be able to find out the importance and demerit of using Nash equilibrium in the real world. Introduction Game theory refers to the study of the techniques of decision making. The study gives calculated methods of giving a strategic decision in an economic issue. It puts related disciplines of philosophy, mathematics and psychology in making strategic decision making. Since its invention in 1944 by John von Neumann and Oskar Morgenstern, it has undergone severall improvement and applications. The Nash equilibrium is a concept in game theory that gives solutions to games that involves more than one player. In Nash equilibrium, every player makes the best decision considering that the opponent would make their own best decision too. Jon Nash realized that one has no capabilities to tell and predict others’ decisions by only viewing one case. Isolation prevents proper analysis of decisions. In addition, every player knows that there is nothing to gain by changing their strategy. Therefore, the only option left for a player is to get know what one player would do by considering the others’ decisions in the process. Game theory uses the concepts of Nash equilibrium when making an analysis of strategic interaction that occurs between the decision makers. Throughout history, Nash’s equilibrium concept has been useful with practical application in times of war and arms races. Some of the practical applications of Nash equilibrium include; mitigation of members in conflict by use of repeated interactions, determining the point in which people of different preferences may agree to cooperate, occurrence of currency crises, the flow of traffic on busy roads, setting up regulatory regulations and during soccer when kicking penalties (Myerson 2013, p56). In Nash equilibrium, everybody gets involved in a game the moment their fate is a point where the decision depends on the other person playing the game. The game does not have all the practical conditions that exist in the real world. Some of the unrealistic assumption that the game assumes are as follows; the concepts operate in the assumption that the players possess powerful computing techniques, through which, they analyze every situation giving no chance to any faults. Human beings operate under situations that may involve a lot of unforeseen situations. Thus, humans are prone to making incorrect decisions during the period. In addition, the concepts call for radical decisions that raise a lot of questions (Zhao 2007, p89). Another unrealistic nature is that it gives either the optimum or a value at equilibrium. It does not give a true value. In pratically, the scenarios are true and would require two choices giving true results. That is; the results of the prisoner’s dilemma are not as optimum as the theory tends to show. In some of the cases, the concept could be unreliable and misleading the practical user. However, such cases are limited since the Nash equilibrium has registered many instances of positive feedback. Nash equilibrium sets up a base in which other theories and practical scenarios can base their applications for success in the real world (Zhao 2007, p77). Conditions that exist in the real world seem to be more complicated that in examples. For example, if an event that two competing companies set their market price at say, $10, one company would attempt to set a slightly lower price to increase its sales, as long ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Assess the practical usefulness and the relevance of game theory in Essay”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1494282-assess-the-practical-usefulness-and-the-relevance
(Assess the Practical Usefulness and the Relevance of Game Theory in Essay)
https://studentshare.org/macro-microeconomics/1494282-assess-the-practical-usefulness-and-the-relevance.
“Assess the Practical Usefulness and the Relevance of Game Theory in Essay”, n.d. https://studentshare.org/macro-microeconomics/1494282-assess-the-practical-usefulness-and-the-relevance.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Assess the relevance and usefulness of psychological studies of memory for an understanding of eyewitness testimony
Thesis statement: Psychological studies of eyewitness memory relevantly and usefully ferret out the real eyewitness testimonies from the fabricated. The psychologists can aid determine the relevance and reliability of the eyewitness accounts. The psychologists are useful in determining the acceptance of the eyewitnesses’ memory retrieval of crime scene data.
8 Pages(2000 words)Essay
Game Theory
It takes into account of two cases namely; normal form and extensive form as shone bellow (McCain 25). The normal form will always reveal that both (R, 1) and (W, q) which are Nash equilibrium. However, But the previous relies on the unbelievable threat by the player 2 i.e.
3 Pages(750 words)Essay
Assess the practical usefulness and the relevance of game theory in light of the demanding assumptions behind the concept of the
The scholarly work titled ‘Theory of games and economic behaviour (TGEB)’ by Von Neumann is generally accepted as the starting point of the game theory. Game theory is sometimes referred to as interactive decision theory. This mathematical model can be applied in a wide range of areas like economics, psychology, political science, and biology.
6 Pages(1500 words)Essay
Assess the practical usefulness and the relevance of game theory in light of the demanding assumptions behind the concept of the
These outcomes come out with respect to the preferences or utilities of the said agents. As such, the questionable outcomes might not necessarily arise from the suggestions made by these agents participating in the simulation (Camerer 2011 pg. 26). This makes the study of game theory as strategic point in decision making whereby it incorporates the study of mathematical models of cooperation and conflict between the intelligent, as well as rational decision makers.
6 Pages(1500 words)Essay
Critically assess the relevance of Marxist theory to the study of media texts
We will also summarize relevant elements of the Marxist theory and conclude in the light of a comparative analysis whether Marxist theory is relevant to the film. Moore's comments have been paraphrased in the essay. By way of introducing the film, which at the outset turns out to be a critique of the American state, one can say that it is an investigation of the Bush administration's actions in the wake of the tragic events of the terrorist attack on the World Trade Centre on September 11, 2001.
8 Pages(2000 words)Essay
Report: Critically assess the usefulness to criminology of the concept of 'fear of crime.'
As Skogan (1976, p. 14) succinctly put it more than 30 years ago, it is …a difficult psychological construct affected by a number of aspects of urban life.
4 Pages(1000 words)Essay
Harlem Renissance/ Are we really free or are we the slaves of our own negro culture
The development of jazz poetry, and the conceptualization of the “two-ness” of the souls of the Afircan Americans and the emergence of “the New Negro,” were all calling for a renewal of the African-American identity. The contributions of writers Claude McKay,
8 Pages(2000 words)Essay
Game Theory
The author presents the mathematical and logical applications of the techniques of game theory in other diverse fields and provides useful merits on which different people can make logical and rational decisions. He also shows that game theories can also be applied to resolve relationship problems, or provide the rational moves for couples in relationships.
12 Pages(3000 words)Essay
Game Theory
By carefully analyzing this speech by Vizzini, we can find that the four elements of the game theory are there. In this speech, there are players, and in respect to Vizzini, the players are a clever man, and a fool. On this
1 Pages(250 words)Essay
Discussion
In such a case that the person to whom the task was delegated was untrained with respect to the task denoted, it would have then been the requirement of the
1 Pages(250 words)Assignment
Let us find you another Essay on topic Assess the practical usefulness and the relevance of game theory in light of the demanding assumptions behind the concept of the for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us