MA19902C01 Lecture Notes - Game Theory, Strategic Dominance, Nash Equilibrium
Document Summary
Game theory is widely regarded as having its origins in the mid-nineteenth century with the publication in 1838 of augustin cournot"s researches into the mathematical principles of the. Theory of wealth, in which he attempted to explain the underlying rules governing the behavior of duopolists. However, it was with the publication in 1944 john v neumann and oskar. Movgenlern"s the theory of games and economic behavior that the modern principles of game theory were formulated. Game theory has been widely applied to the behavior of producers with a few or only one competitor. All games have the following: rules, which govern the conduct of the players, pay-offs, such as win, lose, or draw, strategies, which influence the decision-making process. In applying game theory to the behavior of firms we can suggest that firms face several strategic choices which govern their ability to achieve the desired pay-off, including: raise, lower, hold.
