John Nash's Game Theory Analysis

Last century and with no doubts this very one, can be characterized by the ever increasing extent of human interconnectivity. Economic perspective may seem to suggest the need to be able to reflect and systematically model the outcomes of these interactive situations. (Ross, 1997) A significant contribution to understanding the above-mentioned changes has been done by John Nash and his followers who developed the concept of Game Theory and Nash Equilibrium in particular. For the purpose of this essay, the Game Theory would be defined as “study of decision-making where several players must make choices that potentially affect the interests of the other players” (Turocy and Stengel, 2001). The Nash’s equilibrium would be referred as ‘the combination …show more content…
To fully explain the idea the outline on early type of games and their equilibria would be further provided. Although the foundations of game theory are believed to be spread throughout the history (Ross, 1997), all of them seem to lack generality to become a methodology. This idea can be simply exemplified by the contrast of decision-making process of, say, chef cook and of football coach. When the cook chooses a way to stuff a turkey, he does not expect a turkey to become alive and fight for her life - his environment is neutral. But when the football coach tries to plan the match setup and tactics, a player in the role of coach, has to be able to recognize his interaction with other pragmatic and intelligent of rival’s team. The decisions he makes are open for possibilities of both conflict and cooperation, and therefore leaving space for Nash Equilibrium (Ross, 1997). In other words, the ‘chef’ case is an example of earlier games, involving one individual and several strategies that do not include environmental intervention that is called non-parametric feature (Ross, 1997). The