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To: grey_whiskers; All

So I thought I’d do some reading on GAME THEORY - Unfortunately, Game theory assumes “rational” individuals. I don’t think DERPs are very rational.

KEY TAKEAWAYS

Game theory is a theoretical framework to conceive social situations among competing players and produce optimal decision-making of independent and competing actors in a strategic setting.

Using game theory, real-world scenarios for such situations as pricing competition and product releases (and many more) can be laid out and their outcomes predicted.
Scenarios include the prisoner’s dilemma and the dictator game among many others.

It is assumed players within the game are rational and will strive to maximize their payoffs in the game.
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Game Theory

The Basics of Game Theory

The focus of game theory is the game, which serves as a model of an interactive situation among rational players. The key to game theory is that one player’s payoff is contingent on the strategy implemented by the other player.

The game identifies the players’ identities, preferences, and available strategies and how these strategies affect the outcome. Depending on the model, various other requirements or assumptions may be necessary.

Game theory has a wide range of applications, including psychology, evolutionary biology, war, politics, economics, and business. Despite its many advances, game theory is still a young and developing science.

According to game theory, the actions and choices of all the participants affect the outcome of each.

Game Theory Definitions
Any time we have a situation with two or more players that involve known payouts or quantifiable consequences, we can use game theory to help determine the most likely outcomes. Let’s start out by defining a few terms commonly used in the study of game theory:

Game: Any set of circumstances that has a result dependent on the actions of two or more decision-makers (players)
Players: A strategic decision-maker within the context of the game

Strategy: A complete plan of action a player will take given the set of circumstances that might arise within the game
Payoff: The payout a player receives from arriving at a particular outcome (The payout can be in any quantifiable form, from dollars to utility.)

Information set: The information available at a given point in the game (The term information set is most usually applied when the game has a sequential component.)
Equilibrium: The point in a game where both players have made their decisions and an outcome is reached

...snip...

https://www.investopedia.com/terms/g/gametheory.asp


601 posted on 05/22/2021 5:34:38 PM PDT by greeneyes ( Moderation In Pursuit of Justice is NO Virtue--LET FREEDOM RING)
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To: greeneyes

Whom among us doesn’t enjoy a rousing round of Prisoner’s Dilemma, Stag Hunt, or Dictator game?


646 posted on 05/22/2021 7:06:01 PM PDT by ichabod1 (#notmypresident #resisttyranny #resisttranny)
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To: greeneyes

Thanks for posting this.

...and no, they’re not always very rational.


865 posted on 05/23/2021 8:50:25 PM PDT by grey_whiskers (The opinions are solely those of the author and are subject to change with out notice.)
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