GAME THEORY
Objectives
- Describe game theory and how it applies to your every day life
What is Game Theory?
Game theory is the study of mathematical models of conflict and cooperation between intelligent rational decision-makers.
Basically, the study of logical decision making in humans, animals, and computers
It applies to all fields
- Politics
- Economics
- Psychology
- Computer Science
- Biology
- You!
Zero Sum Game
One person's gains result in losses for the other participants so the net benefit is zero.
| A | B | |
|---|---|---|
| A | 1, -1 | 3, -3 |
| B | 0, 0 | -2, 2 |
Symetric Example
Game Theory in Real Life
(besides waffles)
Traffic
- We all want to get to our destination as soon as possible
- There is always a fast route and a not so fast route
- If we all take the fast route, it will no longer be the fast route
- What is the best route for everyone to take?
Relationships
- You are always right
- Your partner is also always right
- Can both people be right?
- In other words, is the best approach for everyone to prove who is right?
Presidential Election
- Democrats vs Republicans
- What other choices do you have?
- What is the best choice for the best case scenario for everyone?
Economics
Opportunity Cost - The loss of potential gain from other alternatives when one alternative is chosen
- What was your decision making process for going through the program?
- If you took a loan, who is benefitting from it?
Keep in mind
- How does your decision affect the whole?
- Can you collaborate for a greater good?