Frequently asked questions
- What is game theory?
- What have game theorists accomplished?
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Game theory is the study of how people interact and make decisions. This broad definition applies to most of the social sciences, but game theory applies mathematical models to this interaction under the assumption that each person's behavior impacts the well-being of all other participants in the game. These models are often quite simplified abstractions of real-world interactions but offer a tractable way of predicting likely outcomes
While most game theorists enjoy games, a "game" is an abstract representation of many serious situations. The analysis of bluffing in poker is quite similar to consideration of nations posturing about their military strength (to make potential foes "fold") but the latter is far from a game.
In short, many kinds. The most commonly studied are the prisoner's dilemma, coordination games, and the game of chicken. Touring this web site will give many examples of these and others. In some games, players "move" simultaneously. In others, there is a clear sequence (like in checkers). In some games, we know what everyone else is doing. In others, we don't get to observe the actions of others. Some games are only played once, others repeatedly with the same opponents.
Game theoretic notions go back thousands of years evidenced in the Talmud and Sun Tzu's writings. However, its contemporary codification is credited to John von Neumann and Oskar Morgenstern who, in 1944, published Theory of Games and Economic Behavior. In the early 1950s, John Nash (of Beautiful Mind fame) generalized these results and provided the basis of the modern field. A rapid rise in theoretical developments led to the founding of the first academic journal devoted to the field by Oskar Morgenstern in 1972.
As any two-handed economist would answer, "yes and no." Any model of the real world must make simplifying assumptions because the real world is too messy to analyze with any precision. There is a constant tradeoff between realism and solvability. Even if we could write down a model that accurately described how people make decisions in general, no amount of computers would be able to solve it (since we would, in essence, have to replicate the millions of "human computers" - brains - responsible for real-life interactions). So what assumptions do we make? The most common are rationality (people take whatever actions are likely to make them more happy - and they know what makes them happy), and common knowledge, (we know that everyone else is trying to make himself or herself as happy as possible, potentially at our expense). These assumptions take many mathematical forms, from very strong (and likely unrealistic) to much weaker forms in the study of behavioral game theory. Experimental economics examines the validity of these assumptions by seeing how real people act in controlled environments. Want to participate?
Economists have innovated antitrust policy, auctions of radio spectrum licenses for cell phones, and the program that matches medical residents to hospitals. Computer scientists have developed new software algorithms and routing protocols. Political scientists have developed election laws for communities and corporations. Military strategists created nuclear policy and notions of strategic deterrence. Sports coaching staffs suggest how often their teams should run versus pass or pitch fast balls versus sliders. Biologists have determined what species have the greatest likelihood of extinction. In short, a lot!
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Examine the hundreds of lectures linked to from this site.
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What book do I suggest? See the whole list, read some reviews, and decide what is appropriate.
In other words, this site is a resource, use it.
For questions about my availability for professional training, consulting, or media inquiries, feel free to contact me. But, I won't help you with your homework - that's your professor's job. I have about 160 of my own students each year. Of course, suggestions, contributions, comments, or criticism relating to Game Theory .net are always solicited.