GameThoery

GameThoery

A GAME is any interaction between multiple people in which each person`s payoff is affected by the decisions made by others.

A player in a game has found NASH EQUILIBRIUM when they make the choice that leaves them better off no matter what their opponents decide to do.

When you`re competing with others, it makes sense to choose THE COURSE OF ACTION that benefits you the most no matter what everyone else decides to do.

Then there are COOPERATIVE GAMES, where every player has agreed to work together toward a common goal.

A COALITION is what you call a group of players in a COOPERATIVE GAME.

SHARPLEY VALUE: A method of dividing up gains or costs among players according to the value of their individual contributions.

• 1st:The contribution of each player is determined by what is gained or lost by removing them from the game.THIS IS CALLED THEIR MARGINAL CONTRIBUTION.

• 2nd:INTERCHANGEABLE PLAYERS HAVE EQUAL VALUE.If w parties bring the same things to the coalition, they should have to contribute the same amount, & should be rewarded for their contributions equally.

• 3rd:Dummy players have zero value. If a member of a coalition contributes nothing then they should receive nothing.

• 4th:If a game has multiple parts, cost or payment should be decomposed across those parts.