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For Those Unfamiliar With Game Theory

 

 

   Game Theory is an academic discipline, as well as analytical discipline, like Logic or Mathematics; whose answers, therefore, are necessarily true based on the definitions and axioms we’ve started with.  Just like Logic, Mathematics, and Statistics; it can be applied to real life situations, and can be applied to many different non-analytical disciplines, like Economics, Political Science, and Ethics, etc.  Its boundaries capture all that is within the following: all instances where we try to formalize our reasoning about strategic situations.  So just thinking about strategic situations isn’t enough—we must be formalizing our reasoning about strategic situations—only then are we in the realm of Game Theory.  “Strategic situations” is a key term in Game Theory and refers to something that has historically been difficult to think about: situations where one individual’s “best response” to the situation depends upon another individual’s “best response” to it, but the other individual’s not-yet-determined “best response” depends, in turn, upon the first individual’s not-yet-determined “best response” to it; yet, again, the first individual’s “best response” can only be discerned, in turn, based upon the other individual’s “best response”, ad infinitum.

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   “Values” in games, particularly,  are described mathematically, and practicing the discipline upon a situation sort of entails an anatomization of any particular game.  A “game”, of course, is any “strategic situation” in this nomenclature.  So Game Theory has a bit of a PR problem in that those who are unfamiliar with what it is immediately get the wrong impression.  It’s not about fun games that people play.  And it’s also not a theory, in terms of some armchair theory someone cooked up, unless Mathematics is also as dismissible.  It is “theory” in terms of thought processes.  It’s a discipline, and analytical in nature—one of only perhaps 4 analytical disciplines in academia: Logic, Mathematics, and Statistics being the others that can be uncontroversially listed. 

 

    Nobel prizes for discoveries in Game Theory have been traditionally awarded by the 'Economics' awarding body due to the abundant applications it finds in that field.