Game Theory

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According to Cicero (Tusculan Disputations V, III, 9), when Pythagoras was once asked who philosophers were, he replied that life seemed to him to resemble the games in the Olympic festival: some men sought glory, others to buy and sell at the games, and some men had come neither for gain nor applause, but for the sake of the spectacle and to understand what was done and how it was done. In the same way, in life, some are slaves of ambition or money, but others are interested in understanding life itself. These give themselves the name of philosophers (lovers of wisdom), and they value the contemplation and discovery of nature beyond all other pursuits.

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Game Theory is an approach to the study of agent behavior in a multi-agent environment. Game Theorists, either: - recommend a setup of incentives to guide the behavior to a desirable outcome, - or study a setup of incentives to predict the outcome.

It was created by Hungarian-American physicist, engineer and mathematician John von Neumann.

Agents decide their conduct mindful of their objectives. The most common objective is utility maximization.

Agents might decide simultaneously, which gives rise to "strategic games" or one after another, in a specific order, which gives rise to "extended games".

At decision time, agents might be certain or uncertain about the environment, as well as the incentives guiding other agents. Under the condition of perfect certainty, the game would be called a game of "perfect information," and a game of "imperfect information" otherwise.