{"id":30899,"date":"2015-05-15T04:30:12","date_gmt":"2015-05-15T04:30:12","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=30899"},"modified":"2024-04-03T13:16:59","modified_gmt":"2024-04-03T07:46:59","slug":"game-theory-study-of-strategic-decision-making","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/game-theory-study-of-strategic-decision-making\/","title":{"rendered":"Game Theory: study of strategic decision making"},"content":{"rendered":"

\"Game<\/a><\/p>\n

Game theory is the scientific study of conflict and cooperation between two or more intelligent decision makers. Concepts of game theory apply to those situations where individual\u2019s actions are independent form what others does. It is assumed that information is known to all the individuals. Game theory provides a platform to plan, model, analyze and understand strategic scenarios. The consistency and strong mathematical foundations of game theory makes it an important tool for modelling and decision making in automated interactive environments.<\/p>\n

Game theory enables a decision-maker to analyze all the players and their strategic options and helps him consider their preferences and reactions in the process of decision making. Major assumption in game theory is that the players are rational. A rational individual is one who always chooses an action whose outcome is in his best interest, given he has information about other players\u2019 actions.<\/p>\n

Dominant strategy<\/em><\/strong> can be defined as that strategy which is expected to give the best possible outcome for any action taken by the opponents. A strategy which cannot give the preferred outcome for at least one strategy of the opponents is called as dominated strategy<\/em><\/strong>. Any rational player would choose a dominant strategy.<\/p>\n

Game theory can be broadly classified into two categories. They are:<\/p>\n