Jon Warner

Mr. Davis

12/15/10

Social Studies Fair

Game Theory: The Application to Reasoning

 Game Theory: The Application to Reasoning

What is game theory? Where do its roots exist? How does it explain the cause

for best reasoning?

There is no one way to clearly define game theory, other than game theory is

the mathematical capturing of behavioral expectations in strategic situations. Now,

that is quite a complex definition, no matter how humble it may seem. In short,

game theory is a mathematical tool used by strategists, especially economists, to

attempt to anticipate the behaviors of all parties involved in situations which require

strategy and to hypothesize the reactions of one party as a result of another party’s

actions.

The historical roots of game theory do not go very deep, though they are

supposedly viewed in writings and teachings as far back as the philosophy of Plato.

True, he never himself claimed any knowledge of such a theory, but his teachings

loosely coincide with the structural basics of the theory as it is today. Game theory

was also used by such notables as Lord James Waldegrave and President James

Madison. The actually origin of the study of the theory of games is often credited to

John von Neumann and Oskar Morgenstern. Many other notables have attributed to

the development of the study of games in other fields such as biology, chemistry,

and war strategy; but these two are given the title of fathers of the field due to their

groundbreaking discoveries on the subject.

Game theory is not solely devised as a mathematical system, but can also be

applied to such broad fields as philosophy. It has undetectably been used to explain

many human reasoning’s throughout history. It was not until 1944, however, that
scientist, economists, and mathematicians were able to explain the order of

decision making and the idea of best rational action through system.

The inner workings of game theory are very broad, and the answers to fill in

the gaps are few and far between. In a generalized sense, game theory starts with a

setting. This setting is the basis for the game, much like a concept to a board game.

In the common board game monopoly, a player tries to obtain money and bankrupt

all opponents by the acquiring of properties and the charging of rent. Economically,

this is a common setting for the practice of the game. Next in the theory’s list of

components is the bodies. The bodies can be described as the players. There is an

infinite amount of bodies to a specific system, though the more bodies you have the

more complex the game becomes. There is also usually a reasoning behind the

game. This can be thought of in two ways: as the playing pieces, or as the risk given

in playing the game.

All of these pieces can be applied as variables to systematic equations, or so

the theory states. Each entity directly effects another, causing a cascading chain

reaction after each variable is acted upon. The reason for this phenomenon is that

with any act done by any body, there can be a change in the resulting action of any

or all other bodies, the reasoning of any or all bodies, or even the overall setting of

the game. Each action has a reaction. However, these reactions do not have to live

within the confines of being either equal or opposite.

This is where the controversy lies. In the theory of games, though not always,

the bodies playing the game are people. Whether individuals, groups, corporations,

or even nations; there is a brain behind the action. This is where the invalidation of

variable thought ends for most people. The human mind acts with so many variable

cycles, and with the misunderstood principle of emotional compromise, that it is

impossible to accurately calculate with any certainty the actions of any one body to

the reactions of another. This is why the practice of analyzing games is purely

theoretical. It has been tested, and proven to be a worthy assumption, but cannot

produce a factual list of strategies based on the unknown.

One might ask why this is. It is because of the irrationality of humans. The

study of games is to achieve an equilibrium, or a state where the most benefit is

achieved for each body involved, but due to a human lack of constant rationality,

equilibrium cannot always be achieved. In most cases of non-equilibrium game sets,

a particular body, or group of bodies, is not looking for the best possible outcome

for each body involved. This can be illustrated by a monopoly held by a corporation,

or by a cartel or union establishing variables at will. A less likely, yet still often seen

occurrence, is when a particular body, or group of bodies, is attempting to achieve

the worst possible outcome for their particular body. This can be caused by

emotional strategy beyond the confines of definable mathematical reasoning, but

nonetheless can be expected as a valid strategy with possible benefits.

With so many unanswered questions and so many variables left to complete

chance, the application of the theory of games is often avoided as a basis for

actions, but more often consulted as a list of optional paths. When using a loose

definition for the term, game theory is used in everyday situations without even

knowing it. Its examples and theoretic situations stem from typical occurrences. I

am sure that any reader of this paper has already used an analysis of games to

determine his or her actions today. The concept is simple, but the application is

vast. This is why it is so easily overlooked. It comes from deep within our desire for

the understanding of logic, and that is why as long as critical thinking occurs, game

theory will be around to back each resolution.