Game theory is a study of strategic decision making. Specifically, it is the study of mathematical models of conflict and cooperation between intelligent rational decision-makers.[1] An alternative term suggested as a more descriptive name for the discipline is interactive decision theory.[2] Game theory is mainly used in economics, political science, and psychology, as well as logic, computer science, and biology. The subject first addressed zero-sum games, such that one persons gains exactly equal net losses of the other participant or participants. Today, however, game theory applies to a wide range of behavioral relations, and has developed into an umbrella term for the logical side of decision science, including both humans and non-humans (e.g. computers). Modern game theory began with the idea regarding the existence of mixed-strategy equilibria in two-person zero-sum games and its proof by John von Neumann. Von Neumanns original proof used Brouwer fixed-point theorem on continuous mappings into compact convex sets, which became a standard method in game theory and mathematical economics. His paper was followed by the 1944 book Theory of Games and Economic Behavior, co-written with Oskar Morgenstern, which considered cooperative games of several players. The second edition of this book provided an axiomatic theory of expected utility, which allowed mathematical statisticians and economists to treat decision-making under uncertainty. This theory was developed extensively in the 1950s by many scholars. Game theory was later explicitly applied to biology in the 1970s, although similar developments go back at least as far as the 1930s. Game theory has been widely recognized as an important tool in many fields. Ten game-theorists have won the Nobel Memorial Prize in Economic Sciences and John Maynard Smith was awarded the Crafoord Prize for his application of game theory to biology.
Posted on: Fri, 22 Aug 2014 03:31:13 +0000
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