Game theoryGame theory is the study of mathematical models of strategic interactions among rational agents. It has applications in all fields of social science, as well as in logic, systems science and computer science. The concepts of game theory are used extensively in economics as well. The traditional methods of game theory addressed two-person zero-sum games, in which each participant's gains or losses are exactly balanced by the losses and gains of other participants.
Nash equilibriumIn game theory, the Nash equilibrium, named after the mathematician John Nash, is the most common way to define the solution of a non-cooperative game involving two or more players. In a Nash equilibrium, each player is assumed to know the equilibrium strategies of the other players, and no one has anything to gain by changing only one's own strategy. The principle of Nash equilibrium dates back to the time of Cournot, who in 1838 applied it to competing firms choosing outputs.
Prisoner's dilemmaThe prisoner's dilemma is a game theory thought experiment that involves two rational agents, each of whom can cooperate for mutual benefit or betray their partner ("defect") for individual reward. This dilemma was originally framed by Merrill Flood and Melvin Dresher in 1950 while they worked at RAND. Albert W. Tucker later formalized the game by structuring the rewards in terms of prison sentences and named it the "prisoner's dilemma". The prisoner's dilemma models many real-world situations involving strategic behavior.
Evolutionary game theoryEvolutionary game theory (EGT) is the application of game theory to evolving populations in biology. It defines a framework of contests, strategies, and analytics into which Darwinian competition can be modelled. It originated in 1973 with John Maynard Smith and George R. Price's formalisation of contests, analysed as strategies, and the mathematical criteria that can be used to predict the results of competing strategies. Evolutionary game theory differs from classical game theory in focusing more on the dynamics of strategy change.
Strategy (game theory)In game theory, a player's strategy is any of the options which they choose in a setting where the outcome depends not only on their own actions but on the actions of others. The discipline mainly concerns the action of a player in a game affecting the behavior or actions of other players. Some examples of "games" include chess, bridge, poker, monopoly, diplomacy or battleship. A player's strategy will determine the action which the player will take at any stage of the game.
Repeated gameIn game theory, a repeated game is an extensive form game that consists of a number of repetitions of some base game (called a stage game). The stage game is usually one of the well-studied 2-person games. Repeated games capture the idea that a player will have to take into account the impact of their current action on the future actions of other players; this impact is sometimes called their reputation. Single stage game or single shot game are names for non-repeated games.
Evolutionarily stable strategyAn evolutionarily stable strategy (ESS) is a strategy (or set of strategies) that is impermeable when adopted by a population in adaptation to a specific environment, that is to say it cannot be displaced by an alternative strategy (or set of strategies) which may be novel or initially rare. Introduced by John Maynard Smith and George R. Price in 1972/3, it is an important concept in behavioural ecology, evolutionary psychology, mathematical game theory and economics, with applications in other fields such as anthropology, philosophy and political science.
Backward inductionBackward induction is the process of reasoning backwards in time, from the end of a problem or situation, to determine a sequence of optimal actions. It proceeds by examining the last point at which a decision is to be made and then identifying what action would be most optimal at that moment. Using this information, one can then determine what to do at the second-to-last time of decision. This process continues backwards until one has determined the best action for every possible situation (i.e.
MinimaxMinmax (sometimes Minimax, MM or saddle point) is a decision rule used in artificial intelligence, decision theory, game theory, statistics, and philosophy for minimizing the possible loss for a worst case (maximum loss) scenario. When dealing with gains, it is referred to as "maximin" – to maximize the minimum gain. Originally formulated for several-player zero-sum game theory, covering both the cases where players take alternate moves and those where they make simultaneous moves, it has also been extended to more complex games and to general decision-making in the presence of uncertainty.
Coordination gameA coordination game is a type of simultaneous game found in game theory. It describes the situation where a player will earn a higher payoff when they select the same course of action as another player. The game is not one of pure conflict, which results in multiple pure strategy Nash equilibria in which players choose matching strategies. Figure 1 shows a 2-player example.
Stag huntIn game theory, the stag hunt, sometimes referred to as the assurance game, trust dilemma or common interest game, describes a conflict between safety and social cooperation. The stag hunt problem originated with philosopher Jean-Jacques Rousseau in his Discourse on Inequality. In the most common account of this dilemma, which is quite different from Rousseau's, two hunters must decide separately, and without the other knowing, whether to hunt a stag or a hare.
Grim triggerIn game theory, grim trigger (also called the grim strategy or just grim) is a trigger strategy for a repeated game. Initially, a player using grim trigger will cooperate, but as soon as the opponent defects (thus satisfying the trigger condition), the player using grim trigger will defect for the remainder of the iterated game. Since a single defect by the opponent triggers defection forever, grim trigger is the most strictly unforgiving of strategies in an iterated game.
Symmetric-key algorithmSymmetric-key algorithms are algorithms for cryptography that use the same cryptographic keys for both the encryption of plaintext and the decryption of ciphertext. The keys may be identical, or there may be a simple transformation to go between the two keys. The keys, in practice, represent a shared secret between two or more parties that can be used to maintain a private information link. The requirement that both parties have access to the secret key is one of the main drawbacks of symmetric-key encryption, in comparison to public-key encryption (also known as asymmetric-key encryption).
Principal–agent problemThe principal–agent problem refers to the conflict in interests and priorities that arises when one person or entity (the "agent") takes actions on behalf of another person or entity (the "principal"). The problem worsens when there is a greater discrepancy of interests and information between the principal and agent, as well as when the principal lacks the means to punish the agent. The deviation from the principal's interest by the agent is called "agency costs".
Adverse selectionIn economics, insurance, and risk management, adverse selection is a market situation where buyers and sellers have different information. The result is the unequal distribution of benefits to both parties, with the party having the key information benefiting more. In an ideal world, buyers should pay a price which reflects their willingness to pay and the value to them of the product or service, and sellers should sell at a price which reflects the quality of their goods and services.
Resource management (computing)In computer programming, resource management refers to techniques for managing resources (components with limited availability). Computer programs may manage their own resources by using features exposed by programming languages ( is a survey article contrasting different approaches), or may elect to manage them by a host – an operating system or virtual machine – or another program. Host-based management is known as resource tracking, and consists of cleaning up resource leaks: terminating access to resources that have been acquired but not released after use.
Reducing agentIn chemistry, a reducing agent (also known as a reductant, reducer, or electron donor) is a chemical species that "donates" an electron to an (called the , , , or ). Examples of substances that are common reducing agents include the alkali metals, formic acid, oxalic acid, and sulfite compounds. In their pre-reaction states, reducers have extra electrons (that is, they are by themselves reduced) and oxidizers lack electrons (that is, they are by themselves oxidized). This is commonly expressed in terms of their oxidation states.
