Definition of the Game Theory

Many economists consider game theory as an important concept of economics. What is the main reason this assumption? The reason the game theory which is usually used by players to see the different aspects of the game. This actually defines how a player will act in different situations. The ability to take a decision during the specific time period is called game theory. However, the thing is their use is not restricted to only games, business owners and higher management can further use them in the real business world. If you are one of those students who got stuck with the game theory, then read the entire blog and get the answers to your question. You can also take a shortcut by hiring game theory assignment help from experts and complete your assignment.

Now let’s begin with some of the basic examples of the game theory to get a detailed knowledge of this concept.

Examples of the Game Theory

There are multiple real-life examples that can be taken as an example of game theory. Out of all these available options, the most common dilemma that can be used for game theory is “prisoner’s dilemma”. In this situation, suppose there are two prisoners who have committed the same crime just like the Walter white from the “breaking bad” series. Now, after knowing that both of the prisoners are involved in the drug dealing, the prosecutor does not have enough evidence to prove this in the courtroom. So, the next step is they take both of them into separate cells for testimony. They are in the separate cells which means there is no mode of communication. So, four deals are represented in front of them.

First: If both of them confess their crimes, then they will have to face 5 years of the jail sentence.

Second: If the first criminal confesses the crime and the second one denies it, then the first one has to face the imprisonment of 3 years whereas the second one has to face the 8 years of imprisonment.

Third: Right opposite to the above situation, if the second one confesses and the first one denies it, then the first one will have to face the 10 years of imprisonment whereas the second one will face 2 years of imprisonment.

Forth: If both of them refuse to confess and denies all charges against them, then both of them will have to face 2 years of imprisonment.

In all of these situations, going with the last one seems the best strategy but it is only possible if both of them are aware of this strategy. Plus, if any of them confess the crime, then they have to face years of imprisonment.

Impact of the Game Theory of Economics

Game theory no doubts bring the revolution in economics by predicting the possible circumstances in the field and what can be done to resolve these issues. Like many entrepreneurs face difficulties while running their business in the first five years’ due to the lack of knowledge of the concepts of entrepreneurial anticipation.

Moreover, Game theory can be used in business to understand the behaviours of the economic agents. With the theory, it becomes much easier to determine which strategy can be used to enhance the effects of the business gain. Those who are writing essay, thesis or assignment on the subject can hire Economics assignment help in Vancouver from BookMyEssay.