Noncooperative Game Theory

In game theory, a noncooperative game in which there is competition between the members, but they do not form groups. In contrast to cooperative game theory, players cannot form coalitions, and they cannot also make agreements. Noncooperative game theory is used in the analysis of various real-world problems, including business competition, auctions, pricing decisions, international relations, and many other strategic interactions. The solutions includes the concept of Nash equilibrium and strategies such as the minimax mixed strategy which is given by John von Neumann. The key difference is that players are not bound to follow any rules. There is no compulsion for them to form groups and share the input and output terms. Every player is independent of the other. This is termed as “independence.” The term noncooperative game theory was first used in 1951 by John Nash in an article in the journal Annals of Mathematics. Noncooperative game theory includes the number of players, objective function, actions and constraints imposed on the players, and outcome of a probabilistic event.