Question

Question 02: Game theory is the study of multi- player decision making in situation where the choices of each player may affect the pay-offs received by other players. Arrange how many types you can categorized Game Theory. ( 10 Marks)

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Note: Plagiarism is strictly prohibited please do not copy paste from internet

Answer 1

As stated in the question, game theory is study of multi-player decision making in a situation the choice of one player will have an impact on the other gains of the other player. The idea is to reach an equilibrium/Nash equilibrium, i.e a position where bother the players have played their games (made a decision) and a conclusion has been made.

The set of actions that the players take, the games that the players will play can be divided into:

1. Cooperative Game

2. Non-Cooperative Game

3. Simultaneous Game

4. Sequential Game

5. Repeated Game

6. One-time/One-Shot game

7. Zero Sum games.

The names of the games suggest what they mean.

1. Cooperative game: This is the type of game that people/2 parties/ cooperative groups make a decision when they know the outcome or final payoff.

2. Non-cooperative Game: This game is where 2 players will make a decision in order to achieve their individual payoff goals.

3. Simultaneous Game: As the name suggests, in such a game both the players play (take decisions) at the same time. Since both of them are taking decisions at the same time, they are unaware of the competitor’s decision/game

4. Sequential Game: the players in such a game will follow each other. Eg. Player A will play his game and after that player B will play his game.

5. Repeated Game: This is the kind of game that is played over and over again.

6. One shot Game: such a game is played only once. The payoff in this type of game is such that it cannot be repeated/ played again. Players are generally selfish since such a game cannot be played a second time.

7. Zero Sum Game: The payoffs of the 2 players in this game will add up to zero. One player can have a positive payoff only when the opposing player has a negative payoff. One can win only if the other loses.

   

Of all the categories, cooperative and non-cooperative games are the most common ones.