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Running Head: GAME THEORY

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Game Theory
Student’s Name
Professor’s Name
Institutional Affiliation
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GAME THEORY

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Game Theory

Game theory is a theory or study of various strategies that people employ to both social
conditions and in games. The theory establishes that people engage in contests and other social
situations using two distinct types of strategies, that is, non-cooperative and cooperative
strategies. Game theory also determines that the participants must decide between collective
benefits and personal benefits. As such, theoretical or situations of the games concern different
circumstances under which the participants must make a choice that has effects on both the
decision-maker and all other participants. In some fields of study, game theory is sometimes
referred to as a “theory of social situations.” Of importance, game theory tries to establish the
kind of games that demonstrates the best strategies and how the participants employ to choose
the best, most appropriate, or rational approach. This paper describes the application of both the
strategy and principles of game theory in individual issues as well as societal concerns.
Besides, this paper criticizes game theory while discussing both the weaknesses and strengths of
the approach when applied to address daily challenges. As such, this document will discuss
various concepts of game theory, including the prisoner's dilemma, utility, equilibrium, and
different elements of the game. While discussing these and other ideas like types of games and
strategies as well as the tragedy of the commons, this analysis will demonstrate how individuals
may apply game theory in various disciplines such as Business, psychology, and economics,
among other subjects. Notably, the field is known as "game theory" primarily because its
emphasis is restricted only to theoretical models or situations and games where one can quickly
analyze how the participants interact and determine the fundamental reasons that push the
participants to make individual decisions.

GAME THEORY

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Game theory offers one of the most convincing critiques of simple games and
circumstances. The term "simple," in this case, applies to the situations and plays with both few
choices and decision-makers. Notably, game theory becomes highly speculative when used in
complex situations or games involving more than two participants. In complex cases, the
participants confront forces that are beyond their control, a condition that makes it hard to
observe and determine rational behaviors (Embrey, Fréchette & Yuksel, 2018). While the
application of game theory has been profound to the decision-makers in game theory
circumstances and parlor games, it has demonstrated a tremendous appeal to a range of real-life
situations – to both institutional and public behavior. The latter has influenced social sciences to
begin applying game theory frameworks. In light of this, various disciplines, including
economics, psychology, computer science, and sociology, among others, employ game theory
approaches.
Although game theory has a considerable background dating since ancient times through
the 1700s, it's recognition as a scientific field happened in the wake of the 20th century. The latter
was influenced by the efforts to use quantitative analyses to rational theoretical quandaries. Not
until the 1940s, people ignored game theory because of poorly developed techniques and the
absence of evidently consistent use of the method to a range of beneficial purposes. However,
during the cold war, people made essential discoveries with empirical proofs, hence the
acknowledgment of game theory as a science (Bardi, 2017). Consequently, people started to
apply some aspects of game theory to global military strategies, war games, social situations,
market strategies, and bargaining strategies in the labor market.

Part I: Game Theory Application

GAME THEORY

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Game theory has repeatedly shaped challenging unions of mathematical and behavioral
conventions that influenced ludicrous mechanical attributes such as “megadeaths” in military
approaches. For example, certain conditions for nuclear war were interpreted into projections of
the number of people that might be killed (Seaberg, Devine & Zhuang, 2017). However, other
areas restricted the capabilities of game theory to simple marketing strategies for their products,
including automobiles, cigarettes, clothes, and toothpaste, among others. These fields tested the
usability of game theory to ensure its validity and identify possible weaknesses as well ...