Essay On Game Theory

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Game Theory was devised in the 1950’s and slowly grew into the field of biology and today it is even used in computers and is one of the most important tool in every field. Game Theory is a psychological theory which usually applies to social conditions, which affect the behavioral and decision making of an individual. This theory is vast and deals with how a group reacts and interact. This theory is used in mostly all major fields such as business, biology, science, logic, computer etc.
A number of laws and theories are used to support the game theory such as zero sum games where one individual gains exactly equal gains exactly equal net losses of other individuals. Probability is one of the major theory which heavily supports the game theory,
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They can study their strategies and decisions they make to buy and sell products , how they engage during transactions and what outcomes that result in the end.
Game theory has three main branches: The mechanism design theory, the general equilibrium theory and the decision theory.
The Mechanism design theory gives analysts flexibility, as it lowers the restrictions on variables. This theory shows the consequences of different regulations and guidelines and how groups of people can take advantages when using certain strategy in different situations. We can look at the examples on auctions where sellers can identify the risks and avoid them completely.
The General equilibrium theory lays down general guidelines to set up rules and restrictions looking at the behavior of people. It is broadly used in economics such as in making tax policies, voting, which intensives to apply and to interpret stock exchanges.
The Decision theory is a game generally used for a single person. It brings the possible outcomes of the choices of a person where high risks equals maximum profits and low risk equals low profits. Probability and bayer laws are generally used for the decision

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