Game Theory Models

A game is basically a structured type of interactive play, usually undertaken for fun or entertainment, and at times used as an educational instrument. In most cases, games are separated from the participant’s purpose in mind, so that the game can be enjoyed even when it isn’t being used for any specific purpose. Games are distinct from choreographed work, which typically are carried out for monetary gain, and from literature, which are generally an expression of philosophical or artistic elements. Most games fall under this category. Games are categorized into action, adventure, card, board, computer, arcade, simulation, sports, word-power, strategy, and time management. These sub-categories can be further subdivided into first-person shooter games (FPS) or first-person perspectives (FPPS).


Video games can either use text messaging to provide feedback, which gives the player feedback on their performance, or use the arcade style of gaming wherein the player must hit a button as soon as they see a beam or other icon appear on the screen. Other popular types of video games are the racing games, such as Mario, Prince of Persia, Donkey Kong, Super Mario, Pac-Man, etc., which require the player to hit a cartridge with a coin to continue playing. Card games, such as Solitaire, were once quite popular, but now they are relegated mostly to children and the elderly, due to the simplicity of the rules and structure. Another type of interactive entertainment is the word-power game, such as Englishbread, Scrabble, etc., which involve using letters of the alphabet to create words.

Game theory refers to the study of the relationship between forces and their effects, and can be studied via the interaction of a game, a set of tools, or the environment. Game theory can be influenced by the work of Leo Tolstoy, who developed the idea of two competing strategies, where one player would employ strategy A, where as another player would employ strategy B. In many cases, the best strategy would be to employ both strategies at the same time, where a win-win result could be reached. Game theory is also able to be influenced by the work of John von Neiller and his work on chess.

In the field of economics, game theory has been used to model the consumption of products by individuals. The game cannot be taken too far as it attempts to capture the real world into its model. In doing so, it is able to forecast the demand for certain goods and services, as well as provide an estimate of the level of inflation. The same methodology is also used in business to determine profitability. Business people may model the strategies of competitors or apply techniques similar to the game theory of economics, to determine whether their actions will create a profit or a loss. Many of the methods applied in business may be applicable in day-to-day life, as many of these skills are learned during game testing.

The field of business has applied the theories of game theory to create a number of different economic models. One of these is the non-cooperative game theory, which postulates that there will exist a set equilibrium price. This equilibrium price is equal to the difference between what costs agents will charge and the amount that they would gain if they did not take any action. The non-cooperative economic models assume that agents will adopt a graded approach, where they either increase production to keep prices from rising above the equilibrium price, or they reduce production to keep prices from falling below the equilibrium price.

Non-cooperative Economic Theories rely on the Prisoners’ Dilemma game theory, where the choice to defect from the group and run away from the game result in a loss of money. The dictator game theory assumes that two individuals share a common goal and knowledge of the future outcomes of the game. If this knowledge is reliable, then the game outcomes will conform to the expected parameters. These non-cooperative economic models provide an essential tool for understanding and even predicting social behaviors and group dynamics.

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