MOULIN Pierre Under The direction of Per Axelson 3 novembre 2013

! !

! ! !

An introduction to « Game Theory », and its applications.
! ! ! !
IBMEC - EM Strasbourg Business School

! ! ! ! ! ! !
GAME THEORY "1

SUMMARY

! ! ! !

!

A brief introduction to the origins of the Game Theory……………..…3 What is a game ?………………………………………………………….……4 What is the purpose of a game ?……………………………………….….….….4 What defines a game ?…………………………………………….…….…….….4 Typology of the actual know games………………………….……….……….…4 How can we represent a game ?……………………….………….………….…..5 Strategies and actions in a game…………………….………………….…..6 Dominant/Dominated Strategies…………………….……………………….….6 Mixed Strategies……………………………………………………………….…6 Notion of The Pareto Optimum…………………………………………………7 A complete, concrete (and classic) example : The Prisoner’s Dilemma………….7 Commitment & Credibility………………………………………………………8 A concrete example of a commitment problem…………………………………9 Conclusion…………………………………………………………………….10 Sources………………………………………………………….…………..…11

! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

GAME THEORY

"2

A/ A brief introduction to the origins of the Game Theory…

!

What is Game Theory ? It is the study of mathematical models of conflict and cooperation between intelligent rational decision-makers. An alternative term would probably be Interactive Decision Theory. Even if this concept is, basically, pure economics, today we can see it in various range of application, from political science to psychology, logic or biology. The first thing that we should question ourselves, speaking of Game Theory, is probably how and when it became a reality that we can use to solve concret issues in economics, and more.

! Pioneers of the concept !

So, before anything else, the paternity of Game Theory lies in two men called respectively John Von Neumann & Oskar Morgenstern. They published in 1944 a common