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

Comments (1) Cite this document
Summary
Macro & Micro Economics By Code+ University Name Macro & Micro Economics Game theory refers to the study of the outcomes from strategic interactions among agents in the economic sectors…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.1% of users find it useful
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 This theory is also known as the interactive decision theory, as such being in a more descriptive manner of the theory as regards to its discipline of administration (Tieben 2012). Economists are the main users of game theory in the establishment of results and determination of outcomes from specific business ideas. In addition, the game theory is also paramount in other sectors such as in political science, in biology, in logic, as well as, in psychology (Nicholson & Snyder 2012 pg. 345) The original idea and concept covered by game theory in the early days of its inception was the addressing of zero-sum games. In these games, the gains of an individual or a person were exactly the equal net losses of the other participants in the simulation theory. Nonetheless; with the development of the modern society and civilization, the game theory concepts developed further to incorporate and apply a wide range of behavioral (Peters 2008 pg. 109). In fact, game theory developed into an umbrella term to refer to or explain the logical side of the science decision. This includes the collection of both humans as well as the non-humans involved in the system, such as the computers (McCain 2010 pg. 189) The modern game theory resulted from the idea that regarded the existence of mixed strategy equilibrium, especially in the two-person zero-sum games, as proved by John Newman. The original proof used by Newman in the development of the game theory was the brouwer’s fixed-point theorem that incorporated continuous mapping into compact convex sets that were standardized through the game theory method as well as the usage of mathematical economics (Hirschey 2008 pg. 208). As such, game theory became an important aspect in the determination of measurable tendencies, as well as, constraints that affect the plausibility of decision making, in addition to determining the right amount of efforts to put into a simulation game in order to guarantee flexible results for the company. This also leads to effective production and management of the company especially considering the right amounts of resources necessary to input into the game, and as such gain the maximum output (McCain 2010 pg. 227). The game theory works closely with the Nash equilibrium. This is especially in the sense that the Nash equilibrium comes around as the concept of game theory that allows derivation of optimal outcomes in the game. This considers the case whereby a game involves the lack of incentives in the players of a game, such as an incentive to deviate from the original chosen strategy after considering the choice made by the opponents. As such, an individual playing the game theory can receive little or no incremental benefits from the changing actions. This also assumes the fact that other players remain at a constant position with their strategies. As such, a game may have a multiple numbers of Nash equilibrium or none at all (Hirschey 2008 pg. 245). The Nash equilibrium is a concept that originated from an inventor known as John Nash, who incorporated this theory into a number of disciplines, ranging in a wide range of perspectives, such as the behavioral ecology to economics. The use of the Nash equilibrium is very simple as it entails application of simple procedures by undertaking all the players’ ...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 - 2”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1496555-assess-the-practical-usefulness-and-the-relevance
(Assess the Practical Usefulness and the Relevance of Game Theory in Essay - 2)
https://studentshare.org/macro-microeconomics/1496555-assess-the-practical-usefulness-and-the-relevance.
“Assess the Practical Usefulness and the Relevance of Game Theory in Essay - 2”, n.d. https://studentshare.org/macro-microeconomics/1496555-assess-the-practical-usefulness-and-the-relevance.
  • Cited: 0 times
Comments (1)
Click to create a comment or rate a document
al
alexandrine22 added comment 5 months ago
Student rated this paper as
This essay saved me today. I liked the structure. It was very useful for my macro & microeconomics course.

CHECK THESE SAMPLES OF Assess the practical usefulness and the relevance of game theory in light of the demanding assumptions behind the concept of the

Game Theory

...the game. The payoff is the value assigned to the result of play, i.e., the outcome—the results of which might be distinct for every player. The main concept behind game theory is that, in a game, each player is trying to maximize their resultant payoff. “The game theoretician is concerned with the mathematical model and with conclusions he can draw from assumptions (in particular about utilities represented by payoffs) that stay put, not with assumptions that capture the entire spectrum of human conflict behavior.”2 At each stage of a game, a wide array of moves is...
12 Pages(3000 words)Research Paper

Game Theory

...Game perfect theory of equilibrium Perfect game equilibrium is a more sophisticated method of the Nash equilibrium concept; this theory attempts to extend the spirit of Selten’s description of the sub-perfection to the games with imperfect information; in it broadest sense, it looks on the probability or chance of a person to win or lose when doing an assessment. 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...
3 Pages(750 words)Essay

Game Theory

...theory provides a scientific quantitative technique in order to assist players to choose an optimal strategy. As any other well developed theoretical framework, the game theory has also some limitations. This theory is based on the assumption that players are knowledgeable about their own and others’ payoffs but this assumption is not practical always. Technique like mixed strategies that are used to solve games, specifically in case of huge pay-off matrix, are complex and difficult to understand. The game theory cannot be effectively applied to...
5 Pages(1250 words)Research Paper

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

...?Nash equilibrium and game theory By: ID Email Address 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. Nash equilibrium has several application in the real world, especially in the economic world. Therefore, the paper would relate the applications of the game theory in real world economic scenarios. When relating the ideas, there will be limitations and advantage of relying on the answer for...
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

.... In addition, today game theory is used in a variety of behavioural relations and is extended to both human as well as non-humans. This theoretical framework first described zero-sum games where an individual’s gains are exactly equal to the net losses of other participant(s). This paper will assess the practical usefulness and the relevance of game theory in light of the demanding assumptions behind the concept of the Nash equilibrium. Game Theory The...
6 Pages(1500 words)Essay

Game Theory

...university student designed a version of Tic-Tac-Toe as a part of his PH D degree. The game was set on an EDSAC vacuum - tube computer with a cathode ray display. It was not until 1958 that the first video game was designed by William Higinbotham. "Tennis for Two" as the name suggests was set on an amplified tennis court for two players who had to return the ball to one another. In 1962, came 'Space war', the first computer game where the designer Steve Russell and his team used a MIT PDP-1 mainframe to design his game. "Space wars" marked the beginning of an era of computer games. The two-player game comprised space...
4 Pages(1000 words)Article

Global Warming Book Report/Review

...generation and future generations. This concept has been debated at length by philosophers, political scientists, economists and environmentalists. The basic problem, as the economist and philosopher John Broome (1992) points out, is how to assess and compare the benefits and costs that occur at different times. One approach is to draw upon the theory, advanced by the philosopher John Rawls (1973), of justice as impartiality between individuals. This impartiality might be extended over time, suggesting that the well-being of each generation should be equally valued. This is particularly relevant to climate change, which scientists have estimated will continue for seventy...
125 Pages(31250 words)Book Report/Review

Game Theory

...Marriages and Game Theory The Game Theory is a knowledge-based technique used in everyday life as a means of devising strategies. Although the game is mostly used in the field of Economics to ensure that players are able to maximize decisions given a set of choices, the mathematical and logical applications of the techniques of game theory have been applied in other diverse fields and provide useful merits on which different people can make logical and rational decisions. In this respect, the techniques involve situations known as games, where the...
12 Pages(3000 words)Essay

Game Theory

...is choosing wine that is not poisoned. That is the reason as to why Vizzini tells that he cannot choose the wine in front of him, because it is likely that the wine has some poison. To win, Vizzini had to choose wine which did not contain poison, which was the payoff in this game (Reiner, 1987). Question 2: It is correct to denote that the consequence of our choices normally depends on the results of an action that emanates from us choosing to do something else. This concept is correct, and prove comes from my personal experiences. For instance, there was a period in time, when I was to engage in a game of wits with my friends. The game under...
1 Pages(250 words)Essay

Game Theory

...First Last Number 23 May The Myth of the Folk Theorem INRODUCTION Game theory is one of the decisive theories that considerably supports in strategic decision-making. It is one of the critical models of mathematical models, which supports in rational decision-making and eliminates the possibility of conflicts and encourages cooperation in different fields of practical life. There are two of the decisive branches of Game Theory, which include Cooperative and Non-Cooperative Game Theory (MIT, “Game Theory”). One of the sub theories of Game...
8 Pages(2000 words)Research Paper
sponsored ads
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.

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