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Essay/Term paper: Game theory (strategic thinking in everyday life)

Essay, term paper, research paper:  Economics

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Game Theory (Strategic Thinking in Everyday Life)

Have you ever been faced with having to live with a decision you made knowing
that had you taken the time to analyze the outcomes you may have made a more
intelligible choice? Most likely the answer to that question was "yes". After
all that is more - or - less is what life is about, a series of choices and the
outcomes we are faced to live with as a result of our decisions. Well your
probably asking yourself "What does this obvious statement have to do with me?".
I'll begin by telling you it has everything to do with you and everything to do
with any situation you may confront from this day forward. After - all life is
but a game and it is our goal to win. The fundamentals of the "Game Theory will
provide us with the basic tools we need to succeed at this game.

What is Game Theory? Simply put, it is the study of rational behavior in
situations requiring interdependence. Wow! That seems like a pretty heavy
statement. Actually it is pretty straight - forward. What is meant by
"rational behavior or interdependance?" Rational behavior in game theory is the
assumption that moral critique aside, the players in the game will act in a way
which provides them with the greatest benefits.. Interdependence is the idea
that what one player does will directly affect the other and vice -versa. By
players I am talking about any two interdependant variables, whether they be
people, countries, animals etc. Game theorist take apart a situation involving
two players and systematically analyze their objectives and their potential
outcomes. In doing so they are able to create models which replicate the basic
motives each player has and diagram the outcomes.. Game theory is something that
to some extent all of us have experience in. Dealing with spouse, co-workers,
business partners, car sales people all involve some sort of relationship of
give and take. So you see, we are not immune to the concepts of game theory. The
theory requires us to understand and practice the art of strategy, and
strategic thinking. Sounds like something we use in chess? Well you are
absolutely right, but these same concepts are used in everday decision making.


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