IE675 Game Theory
Lecture Note Set 1
Wayne F. Bialas
Friday, March 30, 2001
1.1 What is game theory?
Game theory is the study of problems of conﬂict and cooperation among independentdecision-makers.Game theory deals with
games of strategy
games of chance.
The ingredients of a game theory problem include
choices (feasible actions)
payoffs (beneﬁts, prizes, or awards)
preferences to payoffs (objectives)We need to know when one choice is better than another for a particular player.
1.2 Classiﬁcation of game theory problems
Problems in game theory can be classiﬁed in a number of ways.
1.2.1 Static vs. dynamic games
In dynamic games, the order of decisions are important.
Is it ever
possible to implement static decision-making in prac-tice?
DepartmentofIndustrialEngineering,UniversityatBuffalo,342BellHall,Box602050,Buffalo,NY 14260-2050 USA;
MMI Wayne F. Bialas. All Rights Reserved. Duplication of this work is prohibitedwithout written permission. This document produced March 30, 2001 at 2:31 pm.