The Certainty Behind

Chance

• A look into the interactions of people in competition, through the lens of game
theory

• Scurtu Gabriel

• Constantinescu Eduard
• Game theory concerns itself with the
study of mathematical models of
conflict and cooperation between
rational decision-makers. Initially
concerned solely with the concept of
“zero sum” games — in which the sum
of all the gains would be equal to the
sum of all the losses experienced by
the players — now, game theory is
more of an umbrella term for the
science of logical decision making in
humans, animals and computers.
 considered a set of functions called
strategies which yield a certain output,
How is a game classified?
based on the strategy chosen by each
player.

• A game can be classified using various

criteria:

• Zero sum/ non-zero sum

• Symmetrical/asymmetrical

• Cooperative/non-cooperative

• Simultaneous/sequential
• Zero sum/non-zero sum
game
As mentioned before, a zero sum game is one in
which the sum of all the gains is equal to the sum of
all the losses experienced by the players. It is called
zero sum due to the fact that if we were to subtract
one from the other, it would equal zero. This is the
case for games such as poker, where the pot can be
at most split in two between equal hands of two
different players, but the final result always being
that of a single winner.

Non-zero sum games are, as the name implies,

the difference between the wins and losses is any
number other than zero. These are applicable in
economics, where the general goal is always for the
output to exceed the input value.
• Symmetrical/asymmetrical
games
Symmetrical games are those in which the
strategies don’t yield different results if the players are
switched around. Examples of such games are the
representative prisoner dilemma, or the game of
chicken. In other words, the rules are the same for each
player; while an asymmetrical game is the vice versa.
 The prisoner dilemma is probably the most well
known example of game theory. It implies two
imprisoned players with two identical strategies
each: whether to testify against the other or
not. The results are as follows:
The negative numbers
PrisonerA/ Do not represent the years they
Testify
PrisonerB testify get sentenced to
according to the
Do not strategies chosen by
-2, -2 -10, 0
testify each. As it is observable,
the most equitable
Testify 0, -10 -5, -5
results happen when both
players choose the same
strategy.
The cells highlighted in red represent the most balanced choices for
both prisoners, situations called Nash equilibrium, which happens when
neither has to gain more than the other by changing their strategy.
 • Cooperative/non-
cooperative games
A cooperative game is an ulterior addition to game
theory’s field of study, in which players team up in
groups named coalitions, with the purpose of
cooperating and contributing towards the winning
of the said game. Even so, the worth of each player
is still appreciated by their contribution in the coalition
by the notion of Shapley value, which says that their
worth in the coalition is calculated by removing them
from the game, thus resulting their marginal contributi
For example, suppose you could make 10 cookies an hour,
and your friend 20 an hour; but if you work together, you
can make 40 cookies an hour. After an hour, you sell the
cookies for 1$ each, so you get 40$.

If your contribution of 10 cookies an hour gets subtracted

from the 40, that results 30 cookies an hour; that’s the
marginal contribution you friend has done to you. If their
contribution gets removed, that’s 20 cookies less, so 20
cookies is your marginal contribution to them. So in the
first case, your input contribution alone was just 10
cookies, but teaming up with your friend raised your
contribution to 20. So in order to calculate your fair share,
the two numbers are added up and averaged; so
(10+20)/2=15$ is what you get, while your friend winds
up with the rest 25$.
• Simultaneous/sequential
games
Simultaneous games are those in which the players make
moves at the same time; or if not, the latter player making
their move has no idea or information of the move made
by the former player.

Sequential games are those in which players have

knowledge of previous actions/move made by other
players.

<— The scheme of a sequential game

The big difference between these types of games stand in

representation: simultaneous game are represented in
normal form (generally matrixes), while sequential games
are represented in extensive form (decision trees,
• Games with and without
perfect information
This type of games are specifically sequential, because
the information is in reference to previously made steps.
Most of the games studied are concerned with imperfect
information, but notable examples of game with
perfection information are Go, tic-tac-toe, and checkers.
A game with imperfect information would be poker,
where players can do non-credible threats(bluffing), in
order to make the other players doubt their chances.

A common mistake is to confuse perfect information

with complete information. Complete information means
that each player is aware of each other’s strategies and
their outcomes, not necessarily each other’s previous
steps, which is what perfect information implies.
• Applications of game
theory
Despite the name, game theory is used in a great deal
of other fields of study, of which to name a few: political
science, warfare, but more notably in economics.

Why economics? Because it is a practical, common in

everyday life domain with competition as a central
criteria for many of its studied topics, which game
theory focuses on extensively. A more specific term to
convey that is how frequently, players in game theory
could be identified as homo economicus, the human as
an economic being: rational, and with a focus on
meeting their self-interest and goals.
Economy as a whole is considered to be a special
case of an infinite game. An infinite game is one in
which the end-goal of winning the game is extended
into infinity, therefore whose only realistic
manifestation is the requirement to keep playing.

So is the case of economy, where businesses will

keep appearing or disappearing, due to being bought
off by competitors, bankruptcy, or many other
reasons. Players are of a variable number, and so are
the strategies. The only constant is that as long as
there is something to be gained, humanity will
always try and pursue that gain; and mathematics
are there to provide him with the means to do it
optimally.
 Conclusions

• Games occur in many life situations.

• Mathematical analysis requires

understanding of the context and rules.

• Games played repeatedly yield different

responses from games played only once.

• Human psychology often yields unexpected

behavior.
Bibliography

• Game Theory - Wikipedia

en.wikipedia.org/wiki/Game_theory

• John Nash Tribute Page

https://codepen.io/devonnaew/details/vGoNgj

• A Beautiful Mind (2001) - IMDB

https://www.imdb.com/title/tt0268978/

• An introduction to Game Theory

https://www.slideshare.net/paultraf/an-introducti
on-to-game-theory
Thank you for your
attention!