Introduction
The Terminology

Basic Concepts of Game Theory

Types of Games
Applications of Game Theory

A Simple Example

Game theory is the mathematical analysis of a conflict of interest to find optimal choices that will lead to a desired outcome under given conditions. To put it simply, it's a study of ways to win in a situation given the conditions of the situation. While seemingly trivial in name, it is actually becoming a field of major interest in fields like economics, sociology, and political and military sciences, where game theory can be used to predict more important trends.

Though the title of originator is given to mathematician John von Neumann, the first to explore this matter was a French mathematician named Borel. In the 1930s, Neumann published a set of papers that outlined the tenets of game theory and thus made way for the first simulations which considered mathematical probabilities. This was used by strategists during the second World War, and since then has earned game theory a place in the context of Social Science.

It may at first seem arcane to involve mathematics in something that seems purely based on skill and chance, but game theory is in actuality a complex part of many branches of mathematics including set theory, probability and statistics, and plain algebra. This results from the fact that games are dictated by a given set of rules that can be used to outline a set of possible moves which can be ranked by desirability and effectiveness, and with information available, such a set can also be constructed for the opponent, thus allowing predictions about the possible outcomes within a certain number of moves with a probabilistic accuracy.

1. Dauben, Joseph W "Game Theory." Microsoft Encarta. Microsoft Corp, 1999
2. McCain, Roger A. "Game Theory: An Introductory Sketch." Hypertext. 1999 (August 1999)

 
This file was last modified on Wednesday, 22-Sep-2010 12:37:54 PDT