Applying game theory dating
It may sound like fun but game theory is serious business. So far, eight Nobel prizes have been awarded to scientists who based their findings on the way game theory was applied in their field of study, from biology to economics.The basic concept behind game theory is to capture and predict the behavior of all elements of a strategic situation, be that situation truly fun and games or political games, war or weather, money or manners.It sounds a little crass, and the episode probably never happened in reality.But in a ham-fisted, Hollywood sort of way, it does hint at how game theory, the branch of mathematics Nash helped to make famous, can apply to our everyday lives.In modern times, publication of the book, , in 1944 by John von Neumann and Oskar Morgenstern, is considered the benchmark for modern scientific applications but it certainly isn’t the first time in history that game theory was an issue.The Babylonian Talmud, dating to before 500 AD, gives an example of game theory, although not by that name, in a discussion of how to distribute a man’s wealth when he dies and leaves three wives behind.Game theory is a theory of social interaction, which attempts to explain the interaction people have with one another.As the name of the theory suggests, game theory sees human interaction as just that: a game.
Game theory was originally an economic and mathematical theory that predicted that human interaction had the characteristics of a game, including strategies, winners and losers, rewards and punishment, and profits and cost.
Provided the utility function and budget constraints are accurate representations of the individual in question, his or her preference for one or multiple partners could be discerned.
Would this be an accurate representation of reality?
It was initially developed to understand a large variety of economic behaviors, including behavior of firms, markets, and consumers.
The use of the game theory has since expanded in the social sciences and has been applied to political, sociological, and psychological behaviors as well.
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In short, game theory mathematically analyzes strategies used to deal with or predict the outcome of competitive situations, especially situations where one participant (person, player, event, or action) influences the actions of or options for all other participants involved.