Game Theory - Research Paper Example

The theorem is generally used in economics studies, when there is a repetition of the number of games (Policonomics, “Game theory III: Folk theorem”). Game Theory has major contribution on repetitive games, wherein individual players have complete knowledge regarding the strategies of the other players. In Folk Theorem, there is a concept i.e. Nash Equilibrium. This concept is identified to have an outcome of one in a game, as the players are not facilitated with the opportunity of having an incentive by deviating from their choice on the basis of the choices of opponents.

Contextually, players are not able to have incremental benefits, as others are identified to be grounded on their strategies (MIT, “Game Theory”). The objective of the current study is to attain comprehensive understandings regarding Folk Theorem by understanding its applications and citing examples prevalent to the real life world. This comprehensive understandings regarding Folk Theorem would eventually abolish all the myths relevant to it. The origin of Folk Theorem is still uncertain, however, it is believed by most of the researchers that the theorem has originated during the late fifties of the 20th century.

However, in a very short period of time, the theorem has gained extensive popularity. Since, there is an uncertainty regarding the origin of the theorem, it is therefore termed as Folk Theorem. In mathematical conception, Folk Theorem is the one, which is believed and discussed as well as used extensively, however it is not published. Therefore, the theorem is also known as General Feasibility Theorem, but, the name Folk Theorem is popularly renowned (Policonomics, “Game theory III: Folk theorem”).

Folk Theorem is a decisive part of the Game Theory, which is majorly related to economics. The theorem has an extensive role in the Game Theory that has repeated number of events (MIT, “Game Theory”). In this regard, it is elaborated that the theorem suggests that