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209 views23 pagesHistory of Game Theory Development
Game theory was developed in the 1940s by mathematicians John von Neumann and Oskar Morgenstern. It provides a framework for analyzing strategic interactions between players. In the 1950s, many academics expanded game theory to include more players and applications in fields like economics, politics, and evolution. Game theory examines how individuals decide strategies based on anticipating others' strategies, and finds equilibria like the Nash equilibrium where players play optimally given others' choices.
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100% found this document useful (1 vote)
209 views23 pagesHistory of Game Theory Development
Game theory was developed in the 1940s by mathematicians John von Neumann and Oskar Morgenstern. It provides a framework for analyzing strategic interactions between players. In the 1950s, many academics expanded game theory to include more players and applications in fields like economics, politics, and evolution. Game theory examines how individuals decide strategies based on anticipating others' strategies, and finds equilibria like the Nash equilibrium where players play optimally given others' choices.
Uploaded by
Hafsa JahanCopyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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THE HISTORY OF GAME THEORY
WRITTEN BY
HAFSA JAHAN
THE HISTORY OF GAME THEORY
WRITTEN BY
HAFSA JAHAN
WRITTEN BY
HAFSA JAHAN
GAME THEORY WAS WIDELY DEVELOPED BY MANY
OTHER RESEARCHERS AND ACADEMICS IN THE 1950S. IT
IS GENERALLY CREDITED TO THE WORK OF
MATHEMATICIAN JOHN VON NEUMANN AND
ECONOMIST OSKAR MORGENSTERN IN THE 1940S. GAME
THEORY PROVIDES A THEORETICAL FRAMEWORK FOR
IMAGINING SOCIAL INTERACTIONS BETWEEN RIVAL
PLAYERS.
IT FIRST FOCUSED ON TWO-PLAYER
ZERO-SUM GAMES, IN WHICH EACH
PLAYER'S GAINS OR LOSSES ARE
PRECISELY BALANCED BY THOSE OF
THE OTHER PLAYERS. IN THE 1950S, A
LARGE NUMBER OF ACADEMICS
GREATLY EXPANDED THE FIELD OF
GAME THEORY.
ALTHOUGH ANALOGOUS ADVANCEMENTS DATE AT LEAST
AS FAR BACK AS THE 1930S, IT WAS ONLY APPLIED
SPECIFICALLY TO EVOLUTION IN THE 1970S. IT'S POSSIBLE
THAT BEFORE JOHN VON NEUMANN PUBLISHED HIS
ARTICLE ON THE THEORY OF GAMES OF STRATEGY, GAME
THEORY DIDN'T HAVE A NAME (1928). JOHN VON
NEUMANN AND ECONOMIST OSKAR MORGENSTERN'S 1944
BOOK THEORY OF GAMES AND ECONOMIC BEHAVIOR IS
REGARDED AS THE SEMINAL WORK THAT FORMALLY
ESTABLISHED GAME THEORY AS AN INTERDISCIPLINARY
ACADEMIC TOPIC.
INSIGHTS FROM GAME THEORY CAN BE FOUND IN
COMMENTS DATING BACK TO ANCIENT TIMES, DESPITE
THE FACT THAT GAME THEORY HAS ONLY BEEN MADE
MATHEMATICALLY AND LOGICALLY SYSTEMATIC
SINCE 1944.
EARLY IN THE 1950S, A FLURRY OF ACTIVITY SPURRED
FURTHER DEVELOPMENT, LEADING TO THE FIRST
APPLICATIONS IN PHILOSOPHY AND POLITICAL
SCIENCE AS WELL AS REPEATED GAMES AND SHAPLEY
VALUES.
BROUWER'S FIXED-POINT THEOREM ON CONTINUOUS
MAPPINGS INTO COMPACT CONVEX SETS, WHICH
BECAME A WIDELY USED TECHNIQUE IN GAME THEORY
AND MATHEMATICAL ECONOMICS, WAS EMPLOYED IN
VON NEUMANN'S ORIGINAL ARGUMENT.
HIS 1944 BOOK THEORY OF GAMES AND ECONOMIC
BEHAVIOR, WHICH HE CO-WROTE WITH OSKAR
MORGENSTERN, FOLLOWED HIS PAPER.
THE NASH EQUILIBRIUM WAS IMPROVED
UPON IN 1965 WHEN REINHARD SELTEN
PRESENTED HIS SOLUTION NOTION OF
SUBGAME PERFECT EQUILIBRIA. LATER,
HE ADDED PERFECTION WITH
TREMBLING HANDS. AS A RESULT OF
THEIR CONTRIBUTIONS TO ECONOMIC
GAME THEORY, NASH, SELTEN, AND
HARSANYI WERE AWARDED THE 1994
ECONOMICS NOBEL PRIZE.
GAME THEORY MODELS THE STRATEGIC INTERACTION
BETWEEN TWO OR MORE PARTICIPANTS IN A SYSTEM WITH
ESTABLISHED RULES AND OUTCOMES. YOU CAN CHOOSE THE
"BEST" COURSE OF ACTION FOR YOURSELF BY ANTICIPATING
HOW OTHER PEOPLE WILL BEHAVE. THE OBJECTIVE OF GAME
THEORY IS THIS.
GAME THEORY FOCUSES ON "STRATEGIC SITUATIONS," OR
INSTANCES IN WHICH YOUR CHOICE AND THE ACTIONS OF
OTHER PLAYERS WILL AFFECT THE OUTCOME. YOU PROBABLY
APPROXIMATE THIS PROBLEM IN YOUR DAILY LIFE WITHOUT
FORMALIZING IT.
GAME THEORY IS ESSENTIALLY THE STUDY OF HOW
INDIVIDUALS DECIDE ON THEIR STRATEGIES IN LIGHT OF
OTHER PLAYERS' STRATEGIES OR WHAT THEY BELIEVE OTHER
PLAYERS' STRATEGIES TO BE. PAUL MILGROM AND ROBERT B.
WILSON, TWO GAME THEORISTS, WILL RECEIVE THE 2020
NOBEL MEMORIAL PRIZE IN ECONOMIC SCIENCES, MAKING A
TOTAL OF FIFTEEN GAME THEORISTS TO HAVE RECEIVED THIS
HONOR.
THE CRAFOORD PRIZE WAS GIVEN TO JOHN
MAYNARD SMITH IN RECOGNITION OF HIS USE OF
EVOLUTIONARY GAME THEORY. GAME THEORY
CAN BE USED TO SKETCH REAL-WORLD SCENARIOS
AND FORECAST THEIR OUTCOMES. EACH
PARTICIPANT'S ACTIONS AND DECISIONS WILL
HAVE AN IMPACT ON THE OUTCOME. ONE OF THE
BRIGHTEST INDIVIDUALS OF THE TWENTIETH
CENTURY WAS JOHN NASH.
THE "NASH EQUILIBRIUM," WHICH REFERS TO THE
IDEA OF PLAYING A GAME IN SUCH A WAY THAT
YOU CAN AT WORST OBTAIN THE BEST RESULT
YOU SHOULD HAVE IF EVERYONE ELSE PLAYED
PERFECTLY, WAS CREATED BY HIM BY EXTENDING
VON NEUMANN'S WORK ON TWO-PERSON GAMES
TO N-PERSON GAMES.
THIS IDEA APPLIES TO ALL PARTIES TO THE GAME.
ADDITIONALLY, IT IS EXPECTED THAT THOSE WHO
TAKE PART IN THE GAME WILL USE COMMON
SENSE TO MAXIMIZE THEIR REWARDS.
IT'S ALSO IMPORTANT TO KEEP IN MIND THAT WE
FREQUENTLY RESPOND TO THE ACTIONS OF
OTHERS IN A WHOLLY DISTINCT AND SELF-
INTERESTED MANNER.
ACCORDING TO GAME THEORY, A GAME IS WHAT
IT IS DUE TO THE INTERDEPENDENCE OF PLAYER
ACTIONS.
THE STUDY OF GAME THEORY CHANGED THE
EMPHASIS FROM STEADY-STATE EQUILIBRIUM TO
MARKET OPERATIONS.
IT IS USED IN ECONOMICS TO UNDERSTAND
ECONOMIC BEHAVIORS, SUCH AS THOSE OF
CONSUMERS, MARKETS, AND BUSINESSES.
TWO DIFFERENT KINDS OF SIMULTANEOUS AND
SEQUENTIAL STRATEGIC INTERDEPENDENCE ARE
PRESENT IN THE GAME. PARTICIPANTS IN GAME THEORY
CAN CHOOSE BETWEEN A FEW BASIC GAME-PLAYING
OPTIONS.
IN GENERAL, IT IS UP TO EACH PARTICIPANT TO DECIDE
HOW MUCH DANGER THEY ARE WILLING TO ACCEPT
AND HOW FAR THEY ARE WILLING TO GO IN ORDER TO
ACHIEVE THE BEST RESULTS.
ITS EMPLOYMENT IN SATELLITE MONITORING BY WHAT
IS ESSENTIALLY A GLOBAL CRIMINAL SURVEILLANCE
NETWORK, GIVING THEM CAPABILITIES THAT ARE A
FIRST IN WORLD HISTORY, IS ONE EXCEEDINGLY
ESOTERIC AND LITTLE-KNOWN USE OF GAME THEORY.
LIKE MANY ECONOMIC MODELS, GAME THEORY IS
PREDICATED ON A NUMBER OF RIGID PREMISES THAT
MUST HOLD FOR THE THEORY TO BE USEFUL.
GAME THEORY WAS DEVELOPED IN THE 1950S
PRIMARILY BY A. W. TUCKER AND HIS STUDENTS IN
PRINCETON'S MATHEMATICS DEPARTMENT AND AT THE
RAND CORPORATION, A NONPROFIT ORGANIZATION
BASED IN SANTA MONICA, CALIFORNIA, WHO’S ONLY
CLIENT WAS THE U.S. AIR FORCE.
ALTHOUGH VON NEUMANN AND
MORGENSTERN'S WORK WAS THE SUBJECT OF
LENGTHY AND IN-DEPTH REVIEW ARTICLES IN
ECONOMICS JOURNALS, SOME OF WHICH
PREDICTED WIDESPREAD AND QUICK
APPLICATION, TUCKER AND HIS STUDENTS' WORK
WAS PRIMARILY INFLUENCED BY THE WORK OF
OTHER MATHEMATICIANS (NASAR).
PLAYERS ARE THOSE WHO MAKE DECISIONS IN
GAME THEORY. PLAYERS CAN BE SINGLE PEOPLE
OR TEAMS OF PEOPLE WHO, IN SOME WAY,
FUNCTION AS A COHESIVE WHOLE. THE CHOICES
THAT PLAYERS MAKE ULTIMATELY LEAD TO A
RESULT, AND ACCORDING TO GAME THEORY, A
RESULT CAN BE PRETTY MUCH ANYTHING. GAME
THEORY HAS THUS BEEN UTILIZED IN
ECONOMICS TO INVESTIGATE MARKET RIVALRY,
ADVERTISING, PLANNING UNDER UNCERTAINTY,
AND OTHER TOPICS.
REFERENCES:
PRINCETON UNIVERSITY PRESS. "THEORY OF GAMES AND
ECONOMIC BEHAVIOR: OVERVIEW."
MIROWSKI, PHILIP (1992). "WHAT WERE VON NEUMANN AND
MORGENSTERN TRYING TO ACCOMPLISH?". IN WEINTRAUB, E.
ROY (ED.). TOWARD A HISTORY OF GAME THEORY. DURHAM:
DUKE UNIVERSITY PRESS. PP. 113–147. ISBN 978-0-8223-1253-6.
MYERSON, ROGER B. (1991). GAME THEORY: ANALYSIS OF
CONFLICT, HARVARD UNIVERSITY PRESS, P. 1. CHAPTER-
PREVIEW LINKS, PP. VII–XI.
