Game Theory and StrategyThis book is an introduction to mathematical game theory, which might better be called the mathematical theory of conflict and cooperation. It is applicable whenever two individuals—or companies, or political parties, or nations—confront situations where the outcome for each depends on the behavior of all. What are the best strategies in such situations? If there are chances of cooperation, with whom should you cooperate, and how should you share the proceeds of cooperation? Since its creation by John von Neumann and Oskar Morgenstern in 1944, game theory has shed new light on business, politics, economics, social psychology, philosophy, and evolutionary biology. In this book, its fundamental ideas are developed with mathematics at the level of high school algebra and applied to many of these fields (see the table of contents). Ideas like “fairness” are presented via axioms that fair allocations should satisfy; thus the reader is introduced to axiomatic thinking as well as to mathematical modeling of actual situations. |
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alternatives analysis applications arbitration argument assume Athena axioms bargaining behavior better bloc Blues calculate called Chapter choice choose coalition Colin column consider cooperation core cost course dominates economic effect entry equally equilibrium example Exercise expected expected value fact fair Figure four function game theory give hawk Hence idea important imputation individual interesting kind largest Larry least less Mathematical matrix method mixed strategy move Nash nature Notice objects offer optimal outcome Pareto optimal payoff play players political possible predict preferences Principle Prisoner's Dilemma probability problem produce proposed rational reasonable Reds represented result Rose Rose's round saddle point scheme Show situation social solution stable set Suppose threat tree units utilities villages voters voting winning zero-sum Zeus