Algorithmic Game Theory Essay

The decisions or strategies one company chooses will likely motivate other competitors to respond. Using the game theory allows a company to assess and understand more about itself and its competitors so that it can adjust and shape the competition to maximize its win probability (Johnson, 2014). Some examples of how A&D companies apply the game theory in their decision making are:

The Prisoner’s Dilemma is an extremely popular game and way of thinking about social interactions and also economics. It judges how people work together and against each other. It helps us understand what governs the balance between cooperation and competition in business, in politics, and in social settings. The two players in the game can choose between two moves, either 'cooperate' or 'defect'. The idea is that each player gains when both cooperate, but if only one of them cooperates, the other one, who defects, will gain more. If both defect, both lose. The whole game situation and its different outcomes can be summarised with the example provided below, hypothetical situations are imagined with the example below

“An incentive is a bullet, a key: an often tiny object with astonishing power to change anything”(Levitt 20). What professor Steven D. Levitt (a professor of economics at the University of Chicago’s dictum here is that the incentive has a lot of power in this world). And that the metaphor of comparing “incentives”to a bullet really speaks wonders to their strengths. They can change almost any situation by motivating someone to do something in a business situation, all the way to education fields. After many years of college, business and economics students are being taught how to be greedy in college. It is only a matter of time before greed is too powerful. Incentives and greed both have favorable and critical effects on individuals and the populace, but when connected together both can have dangerous effects on future selections.

United States vs. Microsoft is one the largest, most controversial antitrust lawsuits in American history. Many claim the government is wrongly punishing Microsoft for being innovative and successful, arguing that Windows dominates the market because of the product’s popularity, not because of malpractice by the parent company. Others argue in favor of the government, claiming that Microsoft’s practices conflict with the free market ideal. There are many arguments for both sides of the lawsuit, but what the case really comes down to is this: does the government have the right to interfere in today’s marketplace? Or is Microsoft violating laws that are rightfully imposed by the government?

Johnny Cueto VS John Lackey...The first pitch was to the Giants. Strike one. Then a fly out to center field. That was mostly for the rest of he 2-3 innings, it was back and forth. But in the fourth inning, John Lackey got his first hit of his pitch. It was going, looking like it was going out but it dropped and it went straight to Jason Heyward. He had the ball but he dropped it and the Giants had a double for an error. For the rest of that inning, they had only scored one run on a base hit into right field.

When people cannot earn a living within the system or when they are degraded, they will probably strike out. The social bandit represents an individual that rejects the imposing power from social forces whose authority is not fully recognized by the community. The existence of this support from the population is fundamental to distinguish it from a simple criminal. Therefore, he takes the role or is transformed into the avenger. These "symbols" of popular rebellion are men who generally refuse to play the submissive role imposed by society, they are usually single and young men without family, and die almost always betrayed.

The key distinction between SPNE and a Nash equilibrium is place in the game. The idea behind SPNE is that decisions must be optimal for every node of the game. Nash equilibrium does not require solving for every decision node, but only those along the equilibrium path. For there to be a SPNE, each node must be Nash equilibrium. Not every Nash equilibrium is SPNE, but every SPNE is a Nash equilibrium.

The strategic board game Diplomacy focuses on wars, but more importantly the act of negotiating. The players are responsible for forming strategies by both developing and breaking alliances with their competitors. The game is set in Europe during World War I with most teams beginning with similar resources. Each player competes as an either Austria-Hungary, Turkey, Italy, England, France, Russia, or Germany. With at least three home center game pieces on the board, there are strategic movements in order to control one of the eighteen supply centers. This involves phases of negotiation prior to movement of game piece. There is no factor of luck. The main variable in the game is each team’s ability to convince the others to do what they want. The core game strategy is negotiation.

In the first Dictator game, John List gave some participants the option to give half, nothing, or at least some amount of money to the other participants. If the other participants did not accept what they were given, both would go empty handed. Most of the participants that were given money, either gave half of their money or at least a small amount to the participants that did not receive anything. Because participants were giving money, the game portrayed the participants as altruistic. However, in the second Dictator game, List gave everyone money and told each participant that they could either give some of their money or take money away from the other participants. In this game, most of the participants took money away from the other

Some people, like myself, need practical models in order to understand certain concepts and theories. In our text book The Economy Today it completely ignores the intrinsic value of business decisions because you can’t put a numeric value on it. The game Monopoly™ is all about the numbers. In the game of Monopoly™ you have goals: The object is to bankrupt all opponents. To do so, you must be dedicated and make each decision with the aim of improving your chances and wiping out your opponents.” (Monopoly) In what I will call throughout the paper real life, the goal is the same. Look at the excerpt from an ABC New article called The

In oligopoly market, each firm has substantial market power with high degree of interdependence. The key for success in a oligopoly market is to gain more market share than the competitors. Increasing the price can lead to loss of market share to the competitors, so in the oligopoly market, if a firm decreases the price, the other firms will always follow, but if a firm increase the price, the other firms will not follow. The demand curve is kinked.

Nash equilibrium is a solution theory of a non-cooperative game which involves two or more

For example in the Prisoner dilemma, ‘confess’ is the optimal choice for both players so it is the Nash equilibrium. Though, the combine payoff for both players to confess is lower than if both players to deny, which shows that t he Nash equilibrium can also be Pareto inefficient in a finite game. If there is some way for them to cooperate through

While auctions are appealing in theory, the challenges of auction design in practice are insurmountable?

From the above mentioned examples, we can validate that Game-Theoretic modeling plays an invaluable role as a metaphorical approach to strategic management (Saloner, 1991). Game Theory provides measurable simulations of what could happen to enable rationalization of the best course of action without incurring the heavy costs of a true trial and error method. With that said, as noted in our introduction, while game theory