Game Theory for Applied Economists Essay Example | Topics and Well Written Essays - 3000 words

Game Theory for Applied Economists - Essay sampleThis is very helpful in the formulation of the necessary strategies of the business. EXAMPLES OF GAME THEORY-EARLY CONTEXT AND DEVELOPMENT One of the earlier examples of game theory jackpot be seen in the studies of Antoine Cournot in the year 1838. It studied the example of duopoly in the context of a formal type of game and theoretical analysis. The formal theory for the games was brought into the forefront by the mathematician Emile Borel, who had the suggestion of a formal theory of the games by the year 1921.It, was further developed by the kindreds of mathematicians like John von Neumann in the year 1928. The domain of game theory was established as an entity in its own right after the publishing of seminal book called as Theory of Games and Economic port by the likes of Vo Neumann and the economist known as Oskar Morgenstern (Binmore 114). It also received a lot of bonus from the studies of mathematician John Nash who demo nstrated that the finite games have either equilibrium, wherein all the players choose the option that is best for them charge in mind the action of the fellow players. This is a fundamental unit of the design element that can be seen from the studies of these individuals. This concept of non-cooperative game theory was broadened by the application in the year 1950 and 1960s. t has ever been a central point for discussion. It has been applied to the areas of politics and war. This is one of the centralized concepts of this theory. It has also been accepted in the fields of sociology and physiology. It is also seen in the field of biology. These are some of the common points of the relationship that find signify in the development of theories. It received a lot of attention with the awarding of the Nobel Prize in the field of economics to the likes of Nash, John Hars whatsoeveri, and Reinhard Selten. At the period of 1990, it was seen that the game theory was being increasingly u sed in a number of the fields. It is being prominently used in for the designing of auctions. It is being designed in such a manner that there is the distribution of maximum benefits for the population. It has also developed a aim of understanding in terms of the number of the division of electromagnetic spectrum to the telecommunication firms. The usage of this theory has helped in raising billions of dollars in a number of governments. GAME THEORY AND INFORMATION SYSTEMS The level of internal unity and the basis of mathematics make it one of the primary tools of the modeling and design of many of automated processes of conclusiveness making as a part of interactive environments (Fudenberg and Tirole 173). As for example, one of the examples was setting up of cost-effective rules for the bidding process, websites, and the generation of tamper proof negotiation that is useful in the purchase of communication bandwidth. The mechanization of strategic choices is necessary for mak ing the choices to be robust in nature. This is helpful in the avoidance of any kind of manipulation in the process of bidding and guards against any kind of abuse form any of the users. The strength of game theory comes from the process of structuring the problems in a way that all the options become clear.