Knowra Game theory Game theory Game theory is the mathematical study of strategic interactions in which each participant’s outcome depends on the choices of others. It analyzes how incentives and expectations shape decisions.
Normal-form game : A representation of a game that lists players, available strategies, and payoffs for each strategy profile. It is the basic table-based form for expressing simultaneous strategic choices.
Best response : A strategy that gives a player the highest payoff given the other players’ strategies. Equilibrium requires each player's choice to be a best response to the others.
Prisoner's dilemma : A game in which individually rational choices lead players to a worse outcome than mutual cooperation. It exposes the tension between private incentives and collective benefit.
Decision theory : The study of choices under uncertainty, often focusing on one decision-maker and the consequences of available actions. Unlike game theory, it need not model other decision-makers as strategic opponents or partners.
John von Neumann : A Hungarian-American mathematician whose work established foundational results in quantum mechanics, computing, and game theory. His minimax theorem supplied a rigorous solution for finite zero-sum games.
Extensive-form game : A game representation showing decision sequences, available actions, information, and outcomes as a tree. It captures timing and information that a payoff table leaves implicit.
Dominant strategy : A strategy that yields at least as high a payoff as every alternative, regardless of others’ choices. Dominance can determine a player's choice without predicting what others do.
Auction theory : The study of how auction rules affect bidding, allocation, and revenue. Bidders’ strategies depend on their beliefs about rivals and the auction format.
Bayesian game : A game in which players have private information about their own types or payoffs. It extends strategic analysis to uncertainty about other players’ characteristics.
Oskar Morgenstern : An economist who collaborated with John von Neumann on the mathematical foundations of economic behavior. Their collaboration brought game-theoretic reasoning into economics.
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