Game Theory – Games and applications

Game theory began as a small branch in the financial industry with a great book written by John von Neumann and Oskar Morgenstern “Game Theory and Economic Behavior” on zero-sum games. The main focus is the analysis of decisions in strategic situations (games) and interactions in which the loss of one player will be equal to the win of player two.

In addition, game theory is fully integrated in the field of applied mathematics and its applications are many and interesting. Many other scholars have contributed to the development of this theory, such as John Forbes Nash, whose life was turned into a movie called “A Beautiful Mind,” who generalized the problem to non-zero-sum games and offered as a solution, the Nash Equilibrium. Reinhard Selten is also very important when it comes to game theory, as he paved the way for a satisfactory solution of the problem in dynamic games, with the concept of Subgame Perfect Nash Equilibrium and trembling hand perfect equilibrium. Lastly, the other scholar that played a huge role in the development of game theory is John Harsanyi, who dealt with g