888 Words4 Pages

Game Theory
By Trevor Chow
Introduction
Game theory is a branch of mathematics, which uses mathematics and mathematical models to study strategy and decisions between logical decision-makers who need to make competing choices in a strategic game.
A strategic game is a term to describe a situation where several logical decision makers face different choices of action, whereby they may win or lose depending on their choice and other’s choices. These strategic games are often situations of uncertainty, as the decision makers do not know what choices the other decision makers choose to make.
There are many types of strategic games, for example
• Two-person zero-sum game: one’s gain will mean another’s loss (used for military strategy)
• Many-person*…show more content…*

However, if one writes down a smaller number than the other, this smaller number will be taken as the true dollar value, and both travellers will receive that amount along with a bonus/malus: $2 extra will be paid to the traveller who wrote down the lower value and a $2 deduction will be taken from the person who wrote down the higher amount. The question is: what should both travellers do to decide the value they should write down? At first thought, it seems that both should write down $100, since that is the maximum possible. However, thinking twice, the optimal price to write down is actually $2. This is because: 1. A first picks $100, as to get the most. 2. But A then thinks that B, who also wants the most will also write $100. So A will write $99, because then A will get $101 ($99+$2) while B will only get $97 ($99-$2). 3. However, thinking about it again, B will also do the same as A to maximise profit. Therefore, A will lower the price. 4. This cycle continues until A and B both reach $2, which is the minimum amount. This is another classic example that shows why often, following the rational and logical decision will end up with the worst result (except for the airline). However, in the real world, most people actually will pick choosing $100, as they either have

However, if one writes down a smaller number than the other, this smaller number will be taken as the true dollar value, and both travellers will receive that amount along with a bonus/malus: $2 extra will be paid to the traveller who wrote down the lower value and a $2 deduction will be taken from the person who wrote down the higher amount. The question is: what should both travellers do to decide the value they should write down? At first thought, it seems that both should write down $100, since that is the maximum possible. However, thinking twice, the optimal price to write down is actually $2. This is because: 1. A first picks $100, as to get the most. 2. But A then thinks that B, who also wants the most will also write $100. So A will write $99, because then A will get $101 ($99+$2) while B will only get $97 ($99-$2). 3. However, thinking about it again, B will also do the same as A to maximise profit. Therefore, A will lower the price. 4. This cycle continues until A and B both reach $2, which is the minimum amount. This is another classic example that shows why often, following the rational and logical decision will end up with the worst result (except for the airline). However, in the real world, most people actually will pick choosing $100, as they either have

Related

## Sport Obermeyer Case Study Solution

1436 Words | 6 PagesReduce lead times: It can be achieved by either actually reducing the lead times or by encouraging the retailers to place their orders in advance. The pre-order of the raw materials (fabric) by Obersport would also help Obermeyer since this would reduce the lead-times of acquiring this fabric during periods of unexpected jump in demand. If the whole process from delivering raw material to finished goods can be completed in a shorter period of time, the company would be able to produce at a time when demand can be forecasted at almost 100% accuracy. The disadvantage of this method is that it would create additional costs of getting raw materials quicker and shipping finished goods at a faster speed and higher cost but it would reduce sunk cost from excess inventory and increase the market share due to

## Argumentative Essay: The Value Of A Penny

722 Words | 3 PagesWe can instead eradicate the nickel which costs 8 cents to make a piece. If this path is chosen, the penny would become the new five cent piece. This would save more money than eliminating the penny would. Another solution is to change the dollar bill into a coin. “Public acceptance of getting rid of the penny is higher than it is for the dollar, but savings is higher for the dollar than it is for the penny” (Howard).

## Lola Getts Marketing Strategy

413 Words | 2 PagesIf you are fed up of high priced buying you can get discounts on deals with Lola Getts active coupons to reduce price rates which are active at different times of the year and profit at different amounts. Lola Getts active coupons are for making use of facilities we have for you when you are affirmed with buys you don’t get elsewhere. Lola Getts active discount codes reduce price tags to least as there is a requirement you will want to keep note of and make most effective buys which you are in search of. To have an assertive use of Lola Getts active discount codes it is a need you get discounted prices whenever you are willing to make your price cut buys you can get through internet. The Lola Getts active discount codes are the easiest method of ascertaining a fixed price value after adjustment through online coupons you will want to make use of and access with availability and lowered priced buying that is the most wanted process through which you can buy.

## Caspari Inc Case Study Answers

343 Words | 2 PagesFigure 50 normal replacement of the sixty percent pay, although some people are now paying a replacement of eighty percent. The biggest advantage of $1000 a week on Monday is an unusually short period of incompetence, while long distance barriers may give up the $10000 monthly advantage. Arrangements should be organized to adjust the money associated with the help of a terrible need and motivation to come back to work. d. Individuals have the option to accept a reduced income monthly income test if this is their advantage to do so. This option is usually exercised during the first year of retirement, because during that year, the monthly test allowed for a few months, even if the annual income limit exceeded.

## Essay On Medical Deduction

435 Words | 2 PagesE.g. The Economic Recovery Payment in 2009 and 2010 which consisted of a tax credit of 250 dollars to stimulate the economy. In those year businesses were allowed to deduct expenditures in full. This was also to stimulate the economy. A flat tax would not have help to stimulate the

## Game Theory: Game Analysis

1683 Words | 7 PagesGame theory is the science of strategy. It attempts to determine mathematically and logically the actions that “players” should take to secure the best outcomes for themselves in a wide array of “games.” The games it studies range from chess to child rearing and from tennis to takeovers. But the games all share the common feature of interdependence. That is, the outcome for each participant depends on the choices (strategies) of all. In so-called zero-sum games the interests of the players conflict totally, so that one person’s gain always is another’s loss.

## Costco Wholesale Corp. Case Analysis

990 Words | 4 PagesThe key element to Costco overall strategy is to keep costs low. Costco’s competitors charge 20 to 50 percent markup. An alternative would be, marking up prices slightly on their private label brand items will still be significantly less than competitors’ comparable brands. Recommendations: Continue the Costco’s mission, business model, and strategy. However, increase profitability by raising prices slightly.

## Price Discrimination In Hotel Industry

777 Words | 4 PagesIf suppliers charge price P1 for all the rooms, they are only targeting one segment and quantity sold will be Y1. However, by charging a different price P2 to different customers, suppliers now target two segments, so the total revenue will now be P1*Y1+P2*Y2, which is obviously a better option for suppliers than just

## Pros And Cons Of W-4 Tax Deductions

1008 Words | 5 PagesTax deferred deductions will lower the gross taxable wages for the paycheck by the amount of that deduction. Taxes will not be paid on this deducted amount until a later date, usually after retirement. Many people like this type of deduction because it lowers the amount of taxes being withheld from the paycheck increasing the net pay. These style of deductions could be 401(k), IRA and some insurance premium deductions. 401(k) and IRA accounts have their tax liability paid at the time the money is withdrawn out of the account.

## Argumentative Essay: Keep The Penny

668 Words | 3 Pages(Source 2) But on the other side, retailers could be aware of this and bring all their prices down to the lower round and sell them cheaper, which benefits the consumers. Supporters of the penny say we should keep the one cent coin but simply make it cheaper. (Source 2) But if we cut out the penny entirely, we can save even more. A near useless coin can be eliminated and we won't need to spend nears as much money making

### Sport Obermeyer Case Study Solution

1436 Words | 6 Pages### Argumentative Essay: The Value Of A Penny

722 Words | 3 Pages### Lola Getts Marketing Strategy

413 Words | 2 Pages### Caspari Inc Case Study Answers

343 Words | 2 Pages### Essay On Medical Deduction

435 Words | 2 Pages### Game Theory: Game Analysis

1683 Words | 7 Pages### Costco Wholesale Corp. Case Analysis

990 Words | 4 Pages### Price Discrimination In Hotel Industry

777 Words | 4 Pages### Pros And Cons Of W-4 Tax Deductions

1008 Words | 5 Pages### Argumentative Essay: Keep The Penny

668 Words | 3 Pages