Game (game theory) facts for kids

A game in game theory is like a special puzzle or situation. It helps us understand how people or groups make choices when what they do affects others, and what others do affects them. It's a way to study how different choices lead to different results.

Game theory helps us look at situations where there are several players. Each player tries to make the best choice for themselves. But their best choice often depends on what the other players decide to do.

What is Game Theory?

Game theory is a way to study how people or groups make decisions when they are in a situation where their choices depend on each other. Imagine you're playing a board game. Your move depends on what your opponent did, and your opponent's next move will depend on what you do. Game theory looks at these kinds of situations, not just in board games, but in real life too.

How Does a "Game" Work?

In game theory, a "game" isn't always about fun and winning prizes. It's any situation where:

• There are two or more "players" (these can be people, companies, or even countries).
• Each player has different choices they can make.
• The outcome for each player depends on the choices made by all the players.

Who Are the Players?

The "players" in a game theory situation are the people or groups who are making decisions. For example, in a game of rock-paper-scissors, you and your friend are the players. In a business situation, two competing companies might be the players. In politics, different countries negotiating a treaty could be the players.

Making Choices

Each player has a set of actions or choices they can pick from. For instance, in rock-paper-scissors, your choices are rock, paper, or scissors. In a business decision, a company might choose to lower prices, keep them the same, or raise them. The key is that each player's choice affects the overall situation.

What Happens Next?

When all players make their choices, there's an outcome. This outcome affects each player differently. Game theory tries to predict what choices players will make and what the most likely outcome will be. It helps us understand why people make certain decisions and how those decisions lead to specific results.

Why Do We Use Game Theory?

Game theory helps us understand and predict how people will act in strategic situations. A strategic situation is one where your success depends on your choices and the choices of others. It's used in many areas, like:

• Economics: To understand how companies compete or how people make financial decisions.
• Politics: To analyze how countries negotiate or how political parties make choices.
• Biology: To study how animals behave in groups.
• Everyday life: To think about simple decisions like choosing a line at the grocery store.

It helps people make better decisions by thinking about what others might do.

Who Started Game Theory?

The idea of game theory has been around for a while, but it really grew into a scientific field in the 20th century.

Early Thinkers

One of the early thinkers who explored ideas similar to game theory was Émile Borel. He was a French mathematician who wrote about strategies in games of chance in the early 1900s.

The Founders

The two people most famous for developing modern game theory are John von Neumann and Oskar Morgenstern. They wrote a very important book called "Theory of Games and Economic Behavior" in 1944. This book laid out many of the main ideas and rules of game theory that we still use today. They showed how mathematics could be used to study strategic decision-making.

Examples of Games

Let's look at some simple examples to understand how game theory works in practice.

Simple Games You Know

• Rock-Paper-Scissors: This is a classic example. You and your friend are the players. Your choices are rock, paper, or scissors. The outcome (who wins) depends on both your choice and your friend's choice. Game theory can help you think about the best strategy, even if it's just to pick randomly!
• Traffic Lights: Imagine you're at a crossroads. You want to go, and so does the car on the other road. If both of you go, there's a crash. If one waits, the other can go safely. Traffic lights are a solution to this "game," making sure everyone follows a rule to avoid bad outcomes.

Real-Life Choices

• Choosing a Path: If you and a friend are walking towards each other on a narrow path, you both have to decide which way to step to avoid bumping into each other. Your choice depends on what you think your friend will do.
• Negotiating with Friends: If you and your friends are deciding what movie to watch, everyone has a preference. The final choice is the outcome of a "game" where everyone tries to get their preferred movie picked, possibly by convincing others or compromising.