Games like tick-tack-toe, backgammon and chess are games with perfect information and such games are solved by pure strategies. A game is said to have perfect information if, throughout its play, all the rules, possible choices, and past history of play by any player are known to all participants. And a pure strategy-such as the one you found for tick-tack-toe-is an overall plan specifying moves to be taken in all eventualities that can arise in a play of the game. An instance of the game from beginning to end is known as a play of the game. In it, a game is the set of rules that describe it. This simple game illustrates the essential aspects of what is now called game theory. Sticking to that strategy ensures that you will not lose. After learning how to play the game tick-tack-toe, you probably discovered a strategy of play that enables you to achieve at least a draw and even win if your opponent makes a mistake and you notice it. What do they have in common?Ī basic example helps to illustrate the point.

Game: A competitive activity involving skill, chance, or endurance on the part of two or more persons who play according to a set of rules, usually for their own amusement or for that of spectators ( The Random House Dictionary of the English Language,1967).Ĭonsider the following real-world competitive situations: missile defense, sales price wars for new cars, energy regulation, auditing tax payers, the TV show 'Survivor,' terrorism, NASCAR racing, labor- management negotiations, military conflicts, bidding at auction, arbitration, advertising, elections and voting, agricultural crop selection, conflict resolution, stock market, insurance, and telecommunications. Gass, professor emeritus at the University of Maryland's Robert H.

Real life examples of game theory