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Game Theory and its Application

Author(s):

Satyaprakash Sahu , MATS UNIVERSITY RAIPUR; Dr. A J Khan, MATS UNIVERSITY RAIPR

Keywords:

Game Theory, Player, Zero Sum Game Payoff, Strategy Msc 91A60, 60G40

Abstract

Game theory is the formal study of conflict and cooperation. Game theoretic concepts apply whenever the actions of several agents are interdependent. These agents may be individuals, groups, firms, or any combination of these. The concepts of game theory provide a language to formulate, structure, analyze, and understand strategic scenarios. A game is said to be zero-sum if for any outcome, the sum of the payoffs to all players is zero. In a two-player zero-sum game, one player’s gain is the other player’s loss, so their interests are diametrically opposed. Two players interact repeatedly over an innite horizon and occasionally, one of the players has an opportunity to do a favor to the other player. The ability to do a favor is private information and only one of the players is in a position to do a favor at a time. The cost of doing a favor is less than the benet to the receiver so that, always doing a favor is the socially optimal outcome. Intuitively, a player who develops the ability to do a favor in some period might have an incentive to reveal this information and do a favor if she has reason to expect future favors in return. Two players interact repeatedly over an innite horizon and occasionally, one of the players has an opportunity to do a favor to the other player. The ability to do a favor is private information and only one of the players is in a position to do a favor at a time. The cost of doing a favor is less than the benet to the receiver so that, always doing a favor is the socially optimal Outcome. Intuitively, a player who develops the ability to do a favor in some period might have an incentive to reveal this information and do a favor if she has reason to expect future favors in return. The extreme case of players with fully opposed interests is embodied in the class of two player zero-sum (or constant-sum) games.

Other Details

Paper ID: IJSRDV6I21191
Published in: Volume : 6, Issue : 2
Publication Date: 01/05/2018
Page(s): 1602-1604

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