Game Theory: Primitives and Representations

From ancient times, human history has been dotted with numerous instances of conflict and cooperation. Why do humans conflict or cooperate? With the invention of science \(^a\) , the focus of modern science shifts from observing natural and social phenomena to constructing theories to explain the observed phenomena. Game theory is one such theory, rooted in mathematics, to explain conflict and cooperation. According to Morgenstern (1968), the modern origins of game theory date back to Leibnitz, who emphasized the need to model conflict situations in 1710. In 1712, Waldegrave formulated an initial version of the minimax strategy. In 1881, Edgeworth showed the congruence between game theory and economics. One of the early and an important result is the minimax theorem by von Neumann (1928). The publication of “Theory of Games and Economic Behavior” by von Neumann and Morgenstern in 1944 \(^b\) provided a logical foundation of game theory and its application in economic and social sciences. Nash (1950) introduces the concept of Nash equilibrium that forms the cornerstone of applications of game theory in multiple disciplines, from economics to biology.