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passage require analysis and breakdown When looking into what game theory is, two types were found....

passage require analysis and breakdown

When looking into what game theory is, two types were found. Hayes (2019), states “Cooperative game theory deals with how coalitions, or cooperative groups, interact when only the payoffs are known. Non-cooperative game theory deals with how rational economic agents deal with each other to achieve their own goals. The most common non-cooperative game is the strategic game, in which only the available strategies and the outcomes that result from a combination of choices are listed” (Hayes, 2019). Non-cooperative game theory is play between two individuals, not a coalition of people. Game theory is based on rational thinking, meaning that each player is using the most rational philosophy they can to arrive at the most optimal option. According to MBA Crystal Ball (2019), “Game theory attempts to take into consideration the interactions between the participants and their behavior to study the strategic decision-making between rational individuals. It tries to find out the actions that a “player” should perform which would maximize his chances of success mathematically and logically” (MBA, 2019). Reiterating the idea of strategic rational decision making to maximize success.

A time that I can recall in my life where I can say that I used Game Theory is actually happening in my nursing career currently. I am looking for a travel nursing assignment that will place me in Denver Colorado working in an emergency department. Just like the example given by Duronio about using the car dealerships against one another to extract the greatest deal, this is what I have been doing with the different agencies around the Denver area who are employing travel nurses. By doing this, I am gathering the most information that I can to ensure that the agency and job that I choose to take will give me the most net income that is possible to earn. I have always known the rationalization behind using different organizations to ensure that I am paying the best price for a good, I just never knew that Game Theory was the specific thing that I was practicing. Currently, this is benefiting me to ensure that I am setting myself up for the most success and allowing me to have some room to bargain with the different organizations based on different details offered. The more I can get from these agencies, especially in the scary times that are upon us with this virus, the better it is for myself. Fingers crossed that Game Theory will benefit me in the future! I will have to update in a month or so hopefully with some good news!!! ~Taylor

Expert Solution

Game Theory

Definition

According to MBA Crystal Ball 2019, “Game theory attempts to take into consideration the interactions between the participants and their behavior to study the strategic decision-making between rational individuals. It tries to find out the actions that a “player” should perform which would maximize his chances of success mathematically and logically”

Meaning

It basically means that a player in the game theory is using the most rational philosophy while making a decision to arrive at the optimal alternative.

In this, there is a strategic interaction between two or more players in a situation where rules and regulations are applicable.and a certain outcome has to been achieved.

Types of Game Theory

Cooperative Game Theory

According to Hayes (2019), " “Cooperative game theory deals with how coalitions, or cooperative groups, interact when only the payoffs are known."

In other words, there is a group of players called coalition and these coalitions of players are in a competition. The decision-making in this situation is done in a group rather than individually. The cooperative game can be enforced on a voluntary basis or through threats.

Non-Cooperative Game Theory

"Non-cooperative game theory deals with how rational economic agents deal with each other to achieve their own goals. The most common non-cooperative game is the strategic game, in which only the available strategies and the outcomes that result from a combination of choices are listed”

In other words, the competition is between the individual players in the economy or situation. The decision-making to maximize their gains is done by the individual agents.

Strategic Game

It is the most common type of non-cooperative game theory. In this, we have different choices to select from and the strategies and outcomes of the game are already listed or known. Example, Rock-Paper-Scissor.

A real-life example of Game Theory

As was reiterated by Taylor,

He is telling us about an example of game theory that he used in his real-life. He had been using the game theory while looking for a travel nursing assignment in Denver Colorado. He wanted to be placed in the emergency department.

Duronio gave an example where he was able to extract the greatest deal by using the car dealership against one another.

This was what Taylor also did for finding the optimal option. In Denver, he had been interacting with different agents who are interested in employing travel nurses. Through this, he was able to gather the required information which will greatly help him in finding out the work that will provide him with the highest-earning.

Finding different alternatives and evaluate them before making the final decision is the most optimum way to ensure that we are paying the best price for a good. After analysis, he realized that he had been using the game theory in his decisions so far.

Presently, game theory is benefitting him greatly to shape himself in being able to achieve the most success and giving him the opportunity to bargain with different organizations based on different details offered. He emphasized that with the coronavirus endangering everyone, to be able to get more from these agencies is the most optimal way for him to survive. He is also hoping that the game theory will be benefitting him in the future as well.

Conclusion

After analyzing the game theory and its know-how, we can say that to be able to maximise our gains, the strategies, and alternatives to arrive at a certain outcome should be evaluated and selected carefully. There are also several examples of game theory that many individuals or groups have been using in real-life.

Rahul Sunny answered 1 year ago

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