It first considers the moves that are the last in the game, and determines the best move for the player in each case. Then, taking these as given future actions, it proceeds backwards in time, again determining the best move for the respective player, until the beginning of the game is reached. Common knowledge A fact is common knowledge if all players know it, and know that they all know it, and so on. The structure of the game is often assumed to be common knowledge among the players.
After our seminary about negotiation we thought it would be very interesting to make some research about the Game Theory. That is why we were a bit surprised to see that this theory could be also used in a negotiation process to analyze it. We will write a custom essay sample on Game Theory or any similar topic specifically for you Do Not Waste HIRE WRITER It seems to be obvious that using the concepts of that theory could change the course of a negotiation and be understood as a manipulation or just a skill to achieve the goals of the agents in a negotiation.
We decided to divide our work in three parts. First, we will define the Game Theory and make some examples. Secondly, we will make an synthesis on how to act as a negotiator during a negotiation.
Finally, on the third part we will talk about the limits and the interpretation we can make on that subject. Generally, we can say that our goal is to extend the concept of Game Theory. Indeed, we imagined it only in an economic vision and we want to extend it to a negotiation vision.
What is the Game theory?
When we first hear the term 'game theory' in economics lecture, we may initially thought that it is originated in economics or perhaps some other social sciences. On the contrary, it is a branch of applied mathematics where it tries to make rationalize behavior in strategic situations, where the choice of others determines an individual's success in making choices. Game theory is a classic theory which applicable all most all the field. The main significant of game theory is to formulate the alternative strategy to compete with one another and in the same sense it is an essential tool for decision making process according to fluctuations in relevant contents. Game Theory and Economic Analysis Game Theory and Economic Analysis presents the wide range of current contributions of game theory to benjaminpohle.com chapters fall broadly into two categories. Some lay out in a jargon-free manner a particular branch of the theory, the evolution of one of its concepts, or a problem that runs through its development.
The Game theory is a method to study the strategic decision-making. The Game Theory is mainly used in the economy, the political science and the psychology, as well as the logic, negotiation and the biology. The subject of the landed at first sent zero-sum games, such as the earnings gains of a person equal exactly the clear net losses of the other participant s.
Today, however, the Game theory applies to a vast range of relations of class and developed in a term of umbrella for the logical side of science, to include both man and non-people, as computers. Classic uses include the direction of the balance in numerous games, where every person found or developed a tactics which cannot successfully better its results, given the other approach.
These agreements can be made by making either promises or threats. In both cases, the idea is to benefit from an enlargement of the total pie obtained by making commitments. Basic situation In the following example, both sides are looking forward to getting the better pay off.
At first sight, Neil seems to have a better hand since he is able to have payments by using both of his strategies while Bob can only win by using strategy 1.
It is obvious that Neil would better use strategy 1 in order to maximize his payoffs expectations. Bob will probably threatens to take strategy 2 if Neil chooses the first one. This is the most basic commitment example.
Bob would probably choose to maximize his payoffs expectations by choosing the first strategy. They both have to promise to choose the second strategy in order to win.
Side payments allows to change the total pie, and though to reach the targeted situation. In this particular scenario, initially Neil would choose the first strategy, which is not acceptable for Bob in both cases. This is a very bad situation for Bob.
But, fortunately he can also promise side payments, which could change the total pie. We set the situation, we have two participants, one will be selling an apartment two a possible buyer.
At first sight, the man in power is the seller as he fixes the price. Indeed, if the buyer is in the situation of losing the negotiation he will choose to make his opponent loose too.
In another way, if the seller wants to be sure to succeed, he can promise the buyer an offer that will automatically put the buyer in a state of winning.
It is quite easy to understand and gives a good idea of different possibilities in negociation and the interest of cooperation. The main idea is that two burglars get caught by the police after a robbery, and they are interrogated separately.
They have two options:This collection of seven of John Nash's essays highlights his contribution to game theory in economics.
It includes a comprehensive introduction by Ken Binmore, which explains and summarizes John Nash's achievements in the fields of both non-cooperative and co-operative game theory.5/5(3).
Game theory concepts have become hugely important in economics and whilst there are limits to how far analysis can stretch, making use of some of the core ideas can add greatly to your evaluation and analysis marks in the summer papers. Essays on Game Theory is a unique collection of seven of John Nash's essays which highlight his pioneering contribution to game theory in economics.
Featuring a comprehensive introduction by Ken Binmore which explains and summarizes John Nash's achievements in the field of non-cooperative and cooperative game theory, this book will be an 5/5(3).
Find helpful customer reviews and review ratings for Essays on Game Theory at benjaminpohle.com Read honest and unbiased product reviews from our users.5/5(3). When John Nash was awarded the Nobel prize in economics in , many people were surprised to learn that he was alive and well.
Since then, Sylvia Nasar's celebrated biography A Beautiful Mind, has revealed the man. The modern Game Theory was created in with the book “Theory of games and economic behavior” by Oskar Mogenstern and John Von Neumann. It was also developed a lot in the ’s with several studies by John Nash.
Essays; Game Theory; Game Theory. 10 October The Simplest Game: Two Person with a Fixed Pie When think of.