Game Theory was said to have been introduced by Emile Borel in 1921. Borel was a French mathematician who published papers on the theory of games. From this standpoint and according to the article “Game Theory”, Borel could have been named the “first mathematician to envision an organized system for playing games” however; evidence has shown that Borel did not develop his ideas any further. This is the reason why most historians have given credit to John Von Neumann.
Von Neumann was born in 1903 in Budapest, Hungary. His first mathematical paper was published, along with the help of his tutor, when he was 18. Von Neumann went on to study mathematics in college and eventually earned his PhD in mathematics with a minor in both physics and chemistry. Game Theory is said to have been developed by Von Neumann in 1944.
Game Theory deals with two or more decision makers who are called players, who compete as opponents against one another. In game theory, the players select a strategy without any prior knowledge of the other player’s strategy. Siliconfareast.com defines game theory as “a concept that deals with the formulation of the correct strategy that will enable an individual or entity, when confronted by a complex challenge, to succeed in addressing that challenge.”
An example of when game theory can come in handy on my daily job is when our department meets and at the end of the meeting, we sit and try to decide where we will go for lunch. Although this seems like a simple decision to make, this decision does call for strategic thinking and making use of all available resources to come up with the best location that meets each person liking. There are several within our department who cannot eat spicy food and a few others who are on diets. Since this is the case, we have to view and evaluate the costs and benefits of menus from each restaurant in order to make the best decision from the available options.
In “Game Theory Models and Methods”, the prisoner’s dilemma is said to be the most widely known example of game theory. This dilemma was invented by Albert Tucker of Princeton University in 1950. In this dilemma, one is to imagine two people arrested under suspicion of having committed a crime together. The police do not have sufficient evidence to convict the criminals. They are placed in two separate rooms and the police visit each suspect, offering a deal. The deal is basically, whoever gives up evidence on the other person will go free. If neither suspect takes the offer, they are working against the police and both will receive a small punishment because of lack of evidence. Both suspects appeared to have won because neither took the offer, but were given a small punishment. However, if one suspect takes the offer and betrays the other, the one who gave up...