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Game Theory

Prof. A P S Rathore, Mechanical Engg. Dept. M N I T Jaipur

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Environments

Decision under certainty, e.g., Product mix problems Decision under risk, e.g., Decision tree Decision under uncertainty, e.g., game theory

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Method to handle Decision under uncertainty

The The The The

Laplace criterion Mini Max criterion savage criterion Hurwitz criterion

(more optimistic condition) (minimum and maximum loss) (less conservative have a regret matrix)

(attitude ranging from most optimistic to most pessimistic)

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Game theory
Based

on Mini Max Each player has finite or infinite number of choices called strategy The outcome or payoff of a game is summarized as function of strategies for each player

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Assumptions
Finite

no. of players Choices are made simultaneously, i.e., opponents choice is not known List of possible course of action is available to each player Every combination of course of action is associated with an outcome

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Zero sum game

Pay off matrix ( +ve for player A Maxi Min player -ve for player B - Mini Max player ) Ex: Two players tossing coins B M T 4/28/12 A H 1

Bidding problem
Two items: 1 Rs. 75 II Rs. 125 100/- chest is War usually known 130/-

Two bidders: A B

to some degree of certainty in real life

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Example
A has two ammunition stores, one of which is twice as valuable as the other. B is an attacker who can destroy an under undefended store but he can only attack one of them A known that B is about to attack but does not know which A can successful defend only one store at a time.

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Attack smaller larger

Defend smaller store

Attack

-2
Defend smaller store

-1

0
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Solution of 2x2 game

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Graphical solution of (2xN) and (Mx2) games

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Thanks

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