Game theory is a fascinating subject that has numerous applications in various fields, including economics, political science, and psychology. It is the study of strategic decision-making and the behavior of individuals or organizations in competitive situations.
In game theory, there are various decision-makers who have different goals and objectives. In this article, we will explore who the decision makers are in game theory.
Players
The most fundamental decision-makers in game theory are the players. Players can be individuals, groups, or nations that are involved in a particular game. Players have different strategies to achieve their goals, which they use to outmaneuver their opponents.
Types of players
- Rational player: A rational player is one who always makes decisions based on their best interests. They attempt to maximize their payoff by choosing the best strategy available.
- Irrational player: An irrational player is one who does not always make decisions based on their best interests.
They may not understand the game’s rules or may make choices based on emotions rather than logic.
- Cooperative player: A cooperative player is one who works with other players to achieve a common goal. They may give up some of their payoff to help others achieve a higher payoff.
- Non-cooperative player: A non-cooperative player is one who only works towards their individual goals and does not consider other players’ interests.
Payers’ Strategies
Players’ strategies are another essential aspect of game theory. A strategy is a set of actions that a player takes to achieve their goal. Players choose strategies based on what they think other players will do.
Pure and mixed strategies
- Pure strategy: In a pure strategy, a player chooses a single action that they will take throughout the game.
- Mixed strategy: In a mixed strategy, a player selects actions randomly based on probabilities assigned to each possible action.
Domination
Domination is another important concept in game theory. It occurs when one strategy is better than another, regardless of what other players do. A dominant strategy is always the best choice for a player, no matter what the other players do.
The Game Designer
The game designer is the person or entity responsible for creating the rules of the game. They determine how many players are involved, what strategies are available, and how payoffs are calculated.
Types of games
- Zero-sum game: In a zero-sum game, one player’s gain is another player’s loss.
- Non-zero-sum game: In a non-zero-sum game, players can both win or both lose.
- Simultaneous games: In simultaneous games, all players make decisions at the same time without knowledge of their opponents’ choices.
- Sequential games:In sequential games, players make decisions in turn based on their opponents’ previous choices.
The Nature of the Situation
The nature of the situation also plays an important role in decision-making in game theory. Players must consider whether they are playing a one-time game or a repeated game.
One-time vs. repeated games
- One-time game: In a one-time game, players only interact once, and there are no future consequences to their actions.
- Repeated game: In a repeated game, players interact multiple times, and their actions have future consequences.
Conclusion
In conclusion, game theory involves various decision-makers who have different goals and objectives. Players’ strategies are essential, and the game designer creates the rules of the game.
Understanding the nature of the situation is also crucial in decision-making in game theory. By considering these factors, players can make better decisions and achieve their desired outcomes.