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Outcome (game Theory)
In game theory, the outcome of a game is the ultimate result of a strategic interaction with one or more people, dependant on the choices made by all participants in a certain exchange. It represents the final payoff resulting from a set of actions that individuals can take within the context of the game. Outcomes are pivotal in determining the payoffs and expected utility for parties involved. Game theorists commonly study how the outcome of a game is determined and what factors affect it. A strategy is a set of actions that a player can take in response to the actions of others. Each player’s strategy is based on their expectation of what the other players are likely to do, often explained in terms of probability. Outcomes are dependent on the combination of strategies chosen by involved players and can be represented in a number of ways; one common way is a payoff matrix showing the individual payoffs for each players with a combination of strategies, as seen in the payoff mat ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Game Theory
Game theory is the study of mathematical models of strategic interactions. It has applications in many fields of social science, and is used extensively in economics, logic, systems science and computer science. Initially, game theory addressed two-person zero-sum games, in which a participant's gains or losses are exactly balanced by the losses and gains of the other participant. In the 1950s, it was extended to the study of non zero-sum games, and was eventually applied to a wide range of Human behavior, behavioral relations. It is now an umbrella term for the science of rational Decision-making, decision making in humans, animals, and computers. Modern game theory began with the idea of mixed-strategy equilibria in two-person zero-sum games and its proof by John von Neumann. Von Neumann's original proof used the Brouwer fixed-point theorem on continuous mappings into compact convex sets, which became a standard method in game theory and mathematical economics. His paper was f ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Expected Utility Hypothesis
The expected utility hypothesis is a foundational assumption in mathematical economics concerning decision making under uncertainty. It postulates that rational agents maximize utility, meaning the subjective desirability of their actions. Rational choice theory, a cornerstone of microeconomics, builds this postulate to model aggregate social behaviour. The expected utility hypothesis states an agent chooses between risky prospects by comparing expected utility values (i.e., the weighted sum of adding the respective utility values of payoffs multiplied by their probabilities). The summarised formula for expected utility is U(p)=\sum u(x_k)p_k where p_k is the probability that outcome indexed by k with payoff x_k is realized, and function ''u'' expresses the utility of each respective payoff. Graphically the curvature of the u function captures the agent's risk attitude. For example, imagine you’re offered a choice between receiving $50 for sure, or flipping a coin to win $100 i ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Game Tree
In the context of combinatorial game theory, a game tree is a graph representing all possible game states within a sequential game that has perfect information. Such games include chess, checkers, Go, and tic-tac-toe. A game tree can be used to measure the complexity of a game, as it represents all the possible ways that the game can pan out. Due to the large game trees of complex games such as chess, algorithms that are designed to play this class of games will use partial game trees, which makes computation feasible on modern computers. Various methods exist to solve game trees. If a complete game tree can be generated, a deterministic algorithm, such as backward induction or retrograde analysis can be used. Randomized algorithms and minmax algorithms such as MCTS can be used in cases where a complete game tree is not feasible. Understanding the game tree To better understand the game tree, it can be thought of as a technique for analyzing adversarial games, whi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Nash Equilibrium
In game theory, the Nash equilibrium is the most commonly used solution concept for non-cooperative games. A Nash equilibrium is a situation where no player could gain by changing their own strategy (holding all other players' strategies fixed). The idea of Nash equilibrium dates back to the time of Cournot, who in 1838 applied it to his model of competition in an oligopoly. If each player has chosen a strategy an action plan based on what has happened so far in the game and no one can increase one's own expected payoff by changing one's strategy while the other players keep theirs unchanged, then the current set of strategy choices constitutes a Nash equilibrium. If two players Alice and Bob choose strategies A and B, (A, B) is a Nash equilibrium if Alice has no other strategy available that does better than A at maximizing her payoff in response to Bob choosing B, and Bob has no other strategy available that does better than B at maximizing his payoff in response to Alice c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Rational Choice Theory
Rational choice modeling refers to the use of decision theory (the theory of rational choice) as a set of guidelines to help understand economic and social behavior. The theory tries to approximate, predict, or mathematically model human behavior by analyzing the behavior of a rational actor facing the same costs and benefits.Gary Browning, Abigail Halcli, Frank Webster (2000). ''Understanding Contemporary Society: Theories of the Present'', London: Sage Publications. Rational choice models are most closely associated with economics, where mathematical analysis of behavior is standard. However, they are widely used throughout the social sciences, and are commonly applied to cognitive science, criminology, political science, and sociology. Overview The basic premise of rational choice theory is that the decisions made by individual actors will collectively produce aggregate social behaviour. The theory also assumes that individuals have preferences out of available choice ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Prisoner's Dilemma
The prisoner's dilemma is a game theory thought experiment involving two rational agents, each of whom can either cooperate for mutual benefit or betray their partner ("defect") for individual gain. The dilemma arises from the fact that while defecting is rational for each agent, cooperation yields a higher payoff for each. The puzzle was designed by Merrill Flood and Melvin Dresher in 1950 during their work at the RAND Corporation. They invited economist Armen Alchian and mathematician John Williams to play a hundred rounds of the game, observing that Alchian and Williams often chose to cooperate. When asked about the results, John_Forbes_Nash_Jr., John Nash remarked that rational behavior in the Prisoner's dilemma#The_iterated_prisoner's_dilemma, iterated version of the game can differ from that in a single-round version. This insight anticipated a Folk_theorem_(game_theory), key result in game theory: cooperation can emerge in repeated interactions, even in situations where it i ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Pareto Efficiency
In welfare economics, a Pareto improvement formalizes the idea of an outcome being "better in every possible way". A change is called a Pareto improvement if it leaves at least one person in society better off without leaving anyone else worse off than they were before. A situation is called Pareto efficient or Pareto optimal if all possible Pareto improvements have already been made; in other words, there are no longer any ways left to make one person better off without making some other person worse-off. In social choice theory, the same concept is sometimes called the unanimity principle, which says that if ''everyone'' in a society (strict inequality, non-strictly) prefers A to B, society as a whole also non-strictly prefers A to B. The Pareto frontier, Pareto front consists of all Pareto-efficient situations. In addition to the context of efficiency in ''allocation'', the concept of Pareto efficiency also arises in the context of productive efficiency, ''efficiency in prod ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economic Equilibrium
In economics, economic equilibrium is a situation in which the economic forces of supply and demand are balanced, meaning that economic variables will no longer change. Market equilibrium in this case is a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the competitive price or market clearing price and will tend not to change unless demand or supply changes, and quantity is called the "competitive quantity" or market clearing quantity. Understanding economic equilibrium An economic equilibrium is a situation when the economic agent cannot change the situation by adopting any strategy. The concept has been borrowed from the physical sciences. Take a system where physical forces are balanced for instance.This economically interpreted means no further change ensues. Properties of equilibrium Three basic prope ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Strategic Dominance
In game theory, a strategy ''A'' dominates another strategy ''B'' if ''A'' will always produce a better result than ''B'', regardless of how any other player plays. Some very simple games (called straightforward games) can be solved using dominance. Terminology A player can compare two strategies, A and B, to determine which one is better. The result of the comparison is one of: * B strictly dominates (>) A: choosing B always gives a better outcome than choosing A, no matter what the other players do. * B weakly dominates (≥) A: choosing B always gives at least as good an outcome as choosing A, no matter what the other players do, and there is at least one set of opponents' actions for which B gives a better outcome than A. (Notice that if B strictly dominates A, then B weakly dominates A. Therefore, we can say "B dominates A" to mean "B weakly dominates A".) * B is weakly dominated by A: there is at least one set of opponents' actions for which B gives a worse outcome than A, ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Stock Trader
A stock trader or equity trader or share trader, also called a stock investor, is a person or company involved in trading equity securities and attempting to profit from the purchase and sale of those securities. Stock traders may be an investor, agent, hedger, arbitrageur, speculation, speculator, or stockbroker. Such equity trading in large public company, publicly traded companies may be through a stock exchange. Stock shares in smaller public companies may be bought and sold in over-the-counter (finance), over-the-counter (OTC) markets or in some instances in equity crowdfunding platforms. Stock traders can trade on their own account, called proprietary trading or self-directed trading, or through an agent (law), agent authorized to buy and sell on the owner's behalf. That agent is referred to as a stockbroker. Agents are paid a commission (remuneration), commission for performing the trade. Proprietary or self-directed traders who use online brokerages (e.g., Fidelity, I ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Investment
Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broader viewpoint, an investment can be defined as "to tailor the pattern of expenditure and receipt of resources to optimise the desirable patterns of these flows". When expenditures and receipts are defined in terms of money, then the net monetary receipt in a time period is termed cash flow, while money received in a series of several time periods is termed cash flow stream. In finance, the purpose of investing is to generate a Return (finance), return on the invested asset. The return may consist of a capital gain (profit) or loss, realised if the investment is sold, unrealised capital appreciation (or depreciation) if yet unsold. It may also consist of periodic income such as dividends, interest, or rental income. The return may also inclu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost Of Goods Sold
Cost of goods sold (COGS) (also cost of products sold (COPS), or cost of sales) is the carrying value of goods sold during a particular period. Costs are associated with particular goods using one of the several formulas, including specific identification, first-in first-out (FIFO), or average cost. Costs include all costs of purchase, costs of conversion and other costs that are incurred in bringing the inventories to their present location and condition. Costs of goods made by the businesses include material, labor, and allocated overhead. The costs of those goods which are not yet sold are deferred as costs of inventory until the inventory is sold or written down in value. Overview Many businesses sell goods that they have bought or produced. When the goods are bought or produced, the costs associated with such goods are capitalized as part of inventory (or stock) of goods. These costs are treated as an expense in the period the business recognizes income from sale of the good ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
