Cooperative game theory in the context of "Game theory"

⭐ In the context of game theory, the development of cooperative game theory, as explored by von Neumann and Morgenstern, primarily addressed which aspect of strategic interactions?

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⭐ Core Definition: Cooperative game theory

In game theory, a cooperative or coalitional game is a game with groups of players who form binding "coalitions" with external enforcement of cooperative behavior (e.g. through contract law). This is different from non-cooperative games in which there is either no possibility to forge alliances or all agreements need to be self-enforcing (e.g. through credible threats).

Cooperative games are analysed by focusing on coalitions that can be formed, and the joint actions that groups can take and the resulting collective payoffs.

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👉 Cooperative game theory in the context of Game theory

Game theory is the study of mathematical models of strategic interactions. It has applications in many fields of social science, and is used extensively in economics, logic, systems science and computer science. Initially, game theory addressed two-person zero-sum games, in which a participant's gains or losses are exactly balanced by the losses and gains of the other participant. In the 1950s, it was extended to the study of non zero-sum games, and was eventually applied to a wide range of behavioral relations. It is now an umbrella term for the science of rational decision making in humans, animals, and computers.

Modern game theory began with the idea of mixed-strategy equilibria in two-person zero-sum games and its proof by John von Neumann. Von Neumann's original proof used the Brouwer fixed-point theorem on continuous mappings into compact convex sets, which became a standard method in game theory and mathematical economics. His paper was followed by Theory of Games and Economic Behavior (1944), co-written with Oskar Morgenstern, which considered cooperative games of several players. The second edition provided an axiomatic theory of expected utility, which allowed mathematical statisticians and economists to treat decision-making under uncertainty.

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Cooperative game theory in the context of Continuum of conflict

A conflict continuum is a model or concept various social science researchers use when modeling conflict on a continuum from low to high-intensity, such as from aggression to irritation to explosiveness.

The mathematical model of game theory originally posited only a winner and a loser (a zero-sum game) in a conflict, but was extended to cooperation (a win-win situation and a non-zero sum game), and lets users specify any point on a scale between cooperation, peace, rivalry, contest, crisis, and conflict among stakeholders.

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Cooperative game theory in the context of Non-cooperative game

In game theory, a non-cooperative game is a game in which there are no external rules or binding agreements that enforce the cooperation of the players. A non-cooperative game is typically used to model a competitive environment. This is stated in various accounts most prominent being John Nash's 1951 paper in the journal Annals of Mathematics.

Counterintuitively, non-cooperative game models can be used to model cooperation as well, and vice versa, cooperative game theory can be used to model competition. Some examples of this would be the use of non-cooperative game models in determining the stability and sustainability of cartels and coalitions.

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Cooperative game theory in the context of Self-enforcing agreement

A self-enforcing agreement is an agreement that is enforced only by the parties to it; no external party can enforce or interfere with the agreement. (In this respect it differs from an enforceable contract.) The agreement will stand so long as the parties believe it is mutually beneficial and it is not breached by any party.

In game theory, games in which cooperative behaviour can only be enforced through self-enforcing agreements are called non-cooperative games, whereas games allowing strategies relying on external enforcement are called cooperative games. Nash equilibrium is the most common kind of self-enforcing agreement.

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LINKED FROM (PARENTS)
← Continuum of conflict ← Game theory ← Non-cooperative game ← Self-enforcing agreement ← Conflict continuum ← Game-theoretic ← Non-cooperative game theory
LINKS TO (CHILDREN)
Game theory → Game → Player (game) → Contract law → Non-cooperative game → Self-enforcing agreement → Credible threat →