Disadvantages Of Game Theory

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Game theory

Generally, game theory is a play when the sides can cooperate or conflict with each other. It is applied to situations where two different agents are depended on each other’s choices. The agents can be anyone starting from people ending with companies. The main benefit of game theory is the method that it creates to analyze problems connected with strategic choices
There are two major types; first type of theory is cooperative theory. It s mainly used in political science, in this type of games most important is the power that each player has. In contrast with this cooperation, there is also noncooperative theory; this means that each player makes choice according to their interest and what gets them benefited the most. Noncooparative
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Each firm can decide to stop cooperating in order to increase their profit, even force the other to quit the market. Firm 1 can either keep cooperating with firm 2, or defect. If firm 1 cooperates firm 2 will need to make a decision. It is important that the data is known for the second player after firm 1 chose either to cooperate or to defect. However both of the companies will choose to defect, because both players know that if they take the first step to cooperate the second player will definitely choose to make a decision for its own profit this leaves the first player with 0 benefits. (The reason 1 one will not cooperate). If 1 firm doesn’t cooperate it means this firm defects, when this player one defects the second firm has a choice to get zero payoff or to get 250 million dollars of course 250 is better than nothing so the second player will also…show more content…
Since I am more educated on this subject than I was before and since game theory is very frequent in everyday life, I may use it fluently in my decision making. What I thought before I learned this topic was that every action of a man can be calculated and that all we have on our mind is our own benefit so we can predict what one will do, and that if we are very careful and observant we can know every action before head, but my personal perspective on this idea has changed much to that there is nothing we can predict or say this will happen with some calculations, but knowing what is best decision for us is very
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