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References:
https://www.econlib.org/library/Enc/GameTheory.html
https://www.youtube.com/watch?v=7N_NNVeKat8
https://www.youtube.com/watch?v=0bFs6ZiynSU
https://www.investopedia.com/terms/g/gametheory.asp
https://plato.stanford.edu/entries/game-theory/#Mot

Concept- The actions of others influence our respective situations.
Being aware of how our interactions lead to intersections with other pathways is the broader goal of game theory studies.

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In game theory, the following rules/assumptions are upheld;
[]

  1. A game needs to include multiple players (<2). The number of players in a game can theoretically be infinite, but most games will be put into the context of only 2 players.
  2. The players need to interact with each other but may not necessarily communicate with each other.
  3. At least one of the players knows about the game, the rules, and the consequences.
  4. There needs to be a reward at each point of the game.
  5. We assume that players act rationally and with the goal of maximizing utility.
  6. We assume that players act according to their personal/self interests.
  7. Players acknowledge that the possible outcomes, if known in advance, cannot be changed.
    []
Free Will & it's Implications

"The best situation for all people is one in which each is free to do as he or she pleases."
Hobbes' argument for the existence of a government, as stated in Leviathan, arises from the outcome that since each person wants to act according to what they want, they disregard any outcome where another person needs to be compensated in an agreement for their respective want, considering there is no interest for them to fulfill the other's request.

In the case of everyone purely following their self-interest with no regard to the consequences on the other persons, chaos is eminent.

And that's where we need an entity to ensure that the cost of upholding any bargain is lesser than the cost of not fulfilling their end of the bargain.
In such case, a ruling body must be present to enforce punishment on the person who disregards an agreement, thus allowing transactions to occur without the fear of their collapse.

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Dominant Strategy:

It refers to the strategy taken by one player that lead to superior results regardless of any set of actions taken by the other player(s).
When does this happen?

It depends on 2 factors.

  1. The tactics of the player prioritize endurance
    By focusing on a targeted set of actions which can slowly yet steadily increase their net worth, and by accurately predicting the results of those actions, the player can grow significantly with a continuous feedback loop and achieve dominance in a realistic amount of time.
    Example - Nvidia focused and compounded their actions on becoming the number 1 chip manufacturer in the world by predicting the global demand for investment in AI technologies.

  2. The player's level of establishment in the game world
    If they have laid down a solid foundation that has permeated their presence throughout the game world in terms of activity, their actions will lead to a higher volume of economic output even when they face competition.
    Example - Reliance Jio Telecommunications, which started out only as a wireless network provider in 2015, has since expanded into entertainment, UPI, banking and a host of other services. Their presence in everything increases their chances of holding out against countervailing.

Prisoner's Dilemma & Nash Equilibrium:

The proposed strategy that can be followed in a game is one where no player faces any incentive in changing their stance, assuming that every other player also does not change their stance. This leads to the most optimal result without any variation in possible outcomes.

The Prisoner's Dilemma - 2 criminals are held and interrogated for robbing a bank. They are each being questioned in separate rooms.

  1. If one of them confess, they get sentenced to only 1 year in prison and the other will go in for 10 years.
  2. If both of them confess, each of them will get sentenced for 5 years.
  3. If neither of them confess, both of them will only get sentenced for 3 years.

The possible outcomes are;
a) Criminal 1 confesses and gets 1 year jail time and Criminal 2 goes in for 10 years.
b) Criminal 2 confesses and gets 1 year jail time and Criminal 1 goes in for 10 years.
c) Both criminals confess and get 5 years each in jail time.
d) Neither of them confess and only get sentenced to 3 years.

With proper inspection, we can conclude that the mutually beneficial goal is that neither criminal confesses. While this is a guaranteed result to provide the best result for both players, it may seem unreliable considering that neither player knows what the other player is choosing.

This depends on either criminal having a vested interest in their friend/colleague/family to not sentenced for a longer period on an unfair basis, considering the crime was committed by both through cooperation.

Cooperation is the defining trait of human nature and represents the way forward for us to become better.
Need for Cooperation: [Scan for potential alliances/mastermind groups]
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The Tragedy of the Commons

When a public good or a common resource is used to the level of overconsumption, hence its depletion, is an outcome where a player's pursuit of their own self-interest has led to its extinction, thus rendering it impossible for any player to access the common, increasingly non-existent good.

Instances;
5) Overfishing of natural water bodies
6) Groundwater depletion through continuous deforestation
7) Land acquisition for industrial development

Without the POV of a common good as necessary to be utilized by the whole public and not selective usage of a precious few, we risk the depletion of various finite resources.

The Infinite Game:

In game theory, there are 2 types of games; finite and infinite.
Finite games consist of known players and [fixed rules/objectives] for a finite period of time.
Infinite games consist of known and/or unknown players [dealing with changing rules/objectives] for an unspecified/never-ending duration.

When a finite player plays with finite players, the system is stable.
It's also stable when an infinite player plays with infinite players.

However, [when a finite player plays with an infinite player], the finite player is caught in a quagmire as they [run out of resources/willpower] to continue the game beyond their pursuit to reach their finite goal, which becomes redundant as their capabilities decrease.]

For eg, [the Cold War] is an infinite game.
The US had a clear enemy for the Cold war; the Soviets. Once the Soviets dropped out due to draining of their resources, the United States declared that they had won the war.
But little did they realize that the US had [only won 1 battle with one of their opponents], for the game they have been playing was an infinite one where the new players arise to replace the earlier ones.
The Soviet's threat of their nuclear arsenal was replaced by the emergence of Pakistan, North Korea, Iran, etc.

How did this happen?
This is because the US soon started acting only according to [their own self-interests].
In a infinite game/war, it is crucial that players act by first evaluating [their own values] before indulging in their self-interests.