Game theory

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Game theory is the study of how people make decisions when another person (or more than one other person) can also affect the outcome. Some games are played only once. Other games are played multiple times. Each of the players of the game has a certain behaviour. The player wants to get something. He wants the best result he can get. The question is to decide how to get that result (for exanmple: maximize profit or minimize losses).

[edit] Prisoner's Dilemma

One such game is the prisoner's dilemma. Two criminals are caught after they committed some crime. The police are not certain who really committed the crime and who only helped. They question the two in separate cells. The two prisoners have no way of talking with each other. Each prisoner can either stay silent or betray the other. If both stay silent, they each get a 6 month sentence. If one betrays and the other stays silent, the one that stays silent get a 10 years sentence and the other one goes free. If they both betray each other, they each will get a two year sentence.

In this game it is a better strategy is to betray. If a prisoner betrays, the most he can get is a 2 year sentence. If he stays silent, he might get up to ten years.

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