Game Theory-Based Assignment Problem

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Game theory is a method of understanding and studying human behaviour. If you have an assignment on game theory, you will have to bring to it your understanding of mathematics, economics, and also other social and behavioural sciences.

It might seem like a daunting task, but once with a little effort, you have mastered game theory, you will find that it has several useful applications. Moreover, it is an extremely interesting theory and can throw up some surprising results on application. Even if you lack a background in mathematics or social sciences, you can still understand and use game theory. The founding of game theory is attributed to the mathematician John von Neumann

Games are actually a scientific reference for a much larger variety of interaction between human beings in which the results are dependent upon the manner of interaction between two or more than two people- who may be opposed to one another or have mixed motives. There are certain issues which you must be aware of in order to apply game theory.

What is the implication of selecting strategies on a ‘rational’ basis if results are dependent on strategies selected by others and if information about the event is only partial? Further, in games which permit mutual gain/mutual loss, is it rational to cooperate to incur mutual gain or avoid the possibility of mutual loss or is rational or advisable to behave in an aggressive manner in order to get personal gain, notwithstanding mutual gains or losses?

Further, there is a need to understand those events in which aggression is rational and those circumstances which merit cooperation. Further, you also have to consider the possibility of whether the involved parties have to deal with each again, on a repeat basis, or if this is going to be their sole encounter.

You will also have to understand and gauge if ethical standards of cooperation can emanate from the interaction of individuals who are basically rational egotists. Other issues to consider include the manner in which actual human attitudes are related to rational behaviour, and if there is a difference- what is the nature of these differences. Do people tend to cooperate more than is necessary or rational. Or do they tend to be more aggressive, or do both situations apply depending on the circumstances.

The following are the games which game theory studies-Bankruptcy, Barbarians at the Gate, Battle of the Networks, Caveat Emptor, Conscription Coordination, Escape and Evasion, Frogs Call for Mates, Hawk versus Dove, Mutually Assured Destruction, Majority Rule, Market Niche, Mutual Defense, Prisoner's Dilemma, Subsidized Small Business, Tragedy of the Commons, Ultimatum and Video System Coordination

The aim of game theory is to make available theories of financial and strategic attitudes when people are interacting directly, instead of through the market. In the game theory, ‘games’ tend to be a metaphor for more serious interaction in society. Game theory can be about serious issues such as market competition, arms race, and also environmental pollution. However, these interactions are understood in terms of a game. The choice made by the individual is one of strategy.