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1 Understanding Game theory
GAME THEORY The strategic interaction between players in a game may often involve conflict or cooperation. It can be used to determine optimal outcome from a set of choices. It was first used in economics but has recently been applied in wireless communications. Give a discussion of the basic theory and how it can be applied in a wireless network problem Introduction Game theory is the mathematical study of interaction among independent, self-interested agents and the outcome of this interactions thereof. Game theory is used in diverse fields such as economics, political science, biology, psychology, linguistics, sociology, computer science and wireless communication [1]. Game theory entails the analysis of interactions within a group of individual where the actions of each individual have an effect on the outcome that is of interest to all. It therefore studies the strategic interaction within a group of individuals. Strategic interactions mean that individuals know that their actions will have an effect on the outcome and act accordingly [2]. The internal consistency and mathematical foundations of game theory make it a prime tool for modeling and designing automated decision-making processes in interactive environments. As a mathematical tool for the decision-maker, the strength of game theory is the methodology it provides for structuring and analyzing problems of strategic choice. The process of formally modeling a situation as a game requires the decision-maker to enumerate explicitly the players and their strategic options, and to consider their preferences and reactions [3]. A central assumption in many variants of game theory is that the players are rational. A rational player is one who always chooses an action which gives the outcome he most prefers, which suits him best, given what he expects his opponents to do. The goal of game-theoretic analysis is to predict how the game will be played by rational players or to give advice on how best to play the game against opponents who are rational [2]. Games can be sub-categorized into the following categories;