Chapter 10: Game Theory

In this chapter, you will learn to:

1. Solve strictly determined games.
2. Solve games involving mixed strategies.

Game theory is one of the newest branches of mathematics. It first came to light when a brilliant mathematician named Dr. John von Neumann co-authored with Dr. Morgenstern a book titled Theory of Games and Economic Behavior. Since then it has played an important role in decision making in business, economics, social sciences and other fields.

In this chapter, we will study games that involve only two players. In these games, since a win for one person is a loss for the other, we refer to them as two-person zero-sum games. Although the games we will study here are fairly simple, they will provide us with an understanding of how games work and how they are applied in practical situations. We begin with an example.