Game theory, human co-operation, human conflict, warfare, oligopoly game theory, cartel game theory, Nash equilibrium
Humans come into conflict for many reasons. Conflict can arise due to disagreement, difference in opinion, methodology and values, ownership struggles, and the list goes on. During conflict, individuals or groups of individuals work against each other to achieve separately desirable goals. They also work against each other when they are in competition, but in competition individuals usually share similar incentives and have a common goal. Co-operation is a possible remedy to conflict and competition. If individuals work together and co-operate, a mutually beneficial outcome could potentially be achieved.
[...] How has game theory contributed to our understanding of human co-operation and conflict? Table of Contents Introduction 3 I. Game Theory in Warfare 4 II. Oligopoly game theory 4 III. Cartel game theory 5 IV. Best response 6 Conclusion 7 Reference list 8 Introduction Humans come into conflict for many reasons. Conflict can arise due to disagreement, difference in opinion, methodology and values, ownership struggles, and the list goes on. During conflict, individuals or groups of individuals work against each other to achieve separately desirable goals. [...]
[...] Country 1 can influence the decisions of other country 2 by making statements that can deter them from a certain course of action to achieve an outcome country 1 prefers. However, in order for the ‘threat' to work, it needs to be credible. Meaning that whatever the player states/threatens must be both believable and realistic so that the other player has no choice but to accept the threat as true. This can be applied to conflict in economics. Oligopoly game theory Game theory can be seen at work in real life business situations. Coke and Pepsi are soft drink manufacturers that are considered to be in an oligopolistic market. [...]
[...] Norton & Company, London. R. Aumann What Is Game Theory Trying to Accomplish? Arrow, K. and Honkapohja, S., Eds., Frontiers of Economics, Basil Blackwell, Oxford, 5-46. K. Zbi&e Conflict and cooperation in terms of game theory – Thomas Schelling's research. Studies in logic, grammar and rhetoric 8 (21). Bi&aystok University. D. [...]
[...] If both countries choose to fight, there is a high probability of war and both countries get a payoff of 0. If both refrains, a peaceful agreement to divide the territory has a high probability, and both countries get payoff b. If only one country fights it can take complete ownership of the land yielding payoff of a leaving the losing country with a payoff of c. This is represented by the payoff matrix in table 1 below where a > b > c > 0. [...]
[...] Perfect information is a feature of perfect competition. In game theory this is where all players have full knowledge of other players' strategies and the outcomes from playing certain strategies. For example, in a market all consumers and producers have perfect knowledge of their market prices, utility, cost functions and preferences. The problem with perfect information is that it is very rare in real life games. Especially in simultaneous move games when players have to choose their strategy without knowing which strategy the other player will choose. [...]
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