6 Practical Use Cases of `Game Theory` in the real world
Game theory (GT) is very simply the mathematical study of social interactions (or social dynamics). In the simplest of cases, an interaction between two people is modeled as a game and analyzed. Below are six use cases of the real world where GT is employed.
- Description and modelling: The primary goal of game theory is to describe and model how human populations behave. Examples are centipede game and the dictator game.
- Normative Analysis : Some scholars believed that game theory can' t be used as a predictive tool for the human behavior. It is only limited to suggest how the human behavior will correspond to a situation.
- Economics and Business : It is extensively used in mathematical economics and business for modelling. Auctions, bargains , mergers and acquisition , social network formation are a few to name, there are other applications as well
- Political Science: Game theory has its application in Political Science in the form of fair division, political economy, public choice, war bargaining etc.
- Biology : Game Theory dictates only one principle in Biology : Survival of the fittest. It is used to explain evolution ,evolution of communicating mechanisms between animals, the tendency of prey to form herds and attack a larger predator, the territorial behavior, biological altruism (worker bees care for the queen bee and never mate , basically they try to act beneficial for other organisms while depreciating their chances of survival )
- Computer Science and Logic: Several theories in GT serves as the building blocks of game semantics. Examples are : modelling the AI , randomness in AI behavior and enforcing decision making in the AI
Hope you enjoyed this article. If you know any more of the use cases, I would love to hear about them. Thanks for your time.