Game Theory

The Game Theory, also known as Theory of Social Situations, suggests that it creates a language and structure analysis for making logical decisions in situations of competition and conflict. Investopedia refers to it as “the optimal decision-making of independent and competing actors in strategic setting”. The pioneers of the theory were mathematicians John Nash and John von Nuemann, including economist Oskar Morgenstern. According to Economists, there are two main branches of game theory: one is cooperative and the other is non-cooperative game theory. The two branches differ in how people formalize interdependence among the players. Cooperative theory assumes that groups of platers, are the primary and main units of decision making, and will invoke cooperative behaviour. The cooperative games are said to be mostly seen as a competition between players, instead of individual players. Non-cooperative theory, on the other hand, deals with how individuals interact with one another to achieve his or her own goals. There are other game types such as symmetric and asymmetric, zero-sum and non-zero-sum, and more. Most of the research involved in this theory focuses on how groups of people interact. The theory is mainly used in economics, political science, psychology as well as computer science and poker.

            The theory can be applied to relationships, whether it’s about friendship, business and even romantic relationships; due to the many options and possibilities that may happen. In every situation where 2 sets of people with a given common interest and with a set of strategies that they are following in order to reach what they are interested in; it eventually can be called a game. One example of game theory in a romantic relationship is the process of courtship. Person A tries to sweep Person B off of his or her feet, by either bringing that person gifts, doing acts of service, spending time with them and the rest of the remaining love languages. If player B knows that Player A will cooperate no matter what, he or she can take advantage so that the situation is always in Person A’s favor. In this certain situation, the relationship becomes strategic.

            Game theory can also be applied to common decision making processes during elections. Let us take the US Presidential elections for example. Every US citizen can cast their own vote, also known as the popular vote; which is accumulated in each state. With Donald Trump being the newly elected president of the United States, game theorists made a research on his strategy, called the “Punching Strategy”; it is when a person flatters trump, he will treat that person nicely and will do the opposite once he is criticised. According to Rolling Stone, “game theorists have studied the counter-punching strategy Trump is now known for. In 1980, political scientist Robert Axelrod invited colleagues to design computer programs that would compete against each other in a contest of cooperation and betrayal known as the prisoner's dilemma. In the game, two criminals are offered immunity to turn the other in. If only one snitches, he goes free, and the other receives a five-year sentence. If both inform on each other, they get four years. If neither talks, they get two years. The game is played repeatedly, so each player faces the same choice over and over, whether to be a nice guy who protects his accomplice or a nasty one who betrays him.” Under the game theory, the people most affected under Trump’s strategy would be the public like politicians and celebrities.