That day I watched the movie “A Beautiful Mind”. It is a 2002 Oscar winning film adapted from a book by Sylvia Nasar. This is a movie on John Nash, winner of both Nobel and Abel Prizes. After watching the movie, for about 3/4 days my mind was occupied with the astonishing life of this great mathematician. He suffered from a deadly disease- ‘Schizophrenia’, went off to dark mode, then emerged out of this and grabbed both Nobel and Abel prizes. That is really surprizing!
John Nash won Nobel Prize for his contribution to Game Theory. He received his doctorate degree from Princeton University on this subject in 1950. It was war time. Cold war was going on. He worked for RAND, a research wing of US, during that year. There he worked as a leading expert in developing strategy for cold war conflicts. Use of Game Theory was a great help in this.
Game Theory is a branch of Mathematics used to analyse strategic behaviour of each participant. Every event is considered as a game, and each determining factor is a player or participant. It provides tools to analyse the expected behaviours of every participant. It is a method of strategic thinking. For example, in an accident Tony’s car hits Vic’s car and it costs compensation to Vic. Tony applies Game Theory strategy to minimise the amount.
The event “Prisoner’s Dilemma” is another interesting example. The police arrest two suspects, and question them in separate cells. If they are loyal to each other and refuse to turn down evidence, then they will both be sentenced to one year in jail. But if one betrays the other then he is immediately released, and his partner is sentenced to three years. If prisoners betray each other, then they are sentenced to two years. The dilemma is: should they confess or deny?
One, who studies Game Theory, can figure out the optimal solution from the best possible choices analysing the costs and benefits of each participant of the game. Initially it was limited among Economists and Warriors. Now it has reached business, sociology, biology, politics and many more. It is becoming a powerful medium for forecasting the output of an event depending on different behaviours of participants.
And also, it is making our life smooth, because we can find strategies to meet every event of our life, like budget plan, purchasing of valuables, investments etc.
Author: Dr. Ajanta Choudhury, Department of Mathematics.
Game Theory by Giacomo Bonanno University of California
Theory Of Games And Economic Behavior By John Von Neumann and Oskar Morgenstern