Techniques


Game Theory

"In the past twenty-five years or so there has developed a set of mathematical models known as the theory of games. These models throw light on many aspects of conflict situtations, both static and dynamic...."

"The basic concept of game theory is that of the payoff matrix. A game is a situation in which we have a certain number of parties each of which is capable of assuming one out of a given number of positions or choices (a finite number in the case of a finite game and an infinite number in the case of an infinite game). The outcome or the payoff of the gameo is the set of rewards or penalties accruing to each party at each combination of positions of all the parties. This outcome is expressed in the payoff matrix... We can think of these positions either as simply a rule of choice that is complex enough enough to take care of all possible eventualities.