Strategy (game theory) in the context of "Evolutionarily stable strategy"

In game theory, a Nash equilibrium is a situation where no player could gain more by changing their own strategy (holding all other players' strategies fixed) in a game. Nash equilibrium is the most commonly used solution concept for non-cooperative games.

If each player has chosen a strategy – an action plan based on what has happened so far in the game – and no one can increase one's own expected payoff by changing one's strategy while the other players keep theirs unchanged, then the current set of strategy choices constitutes a Nash equilibrium.

Gambling (also known as betting or gaming) is the wagering of something of value ("the stakes") on a random event with the intent of winning something else of value, where instances of strategy are discounted. Gambling thus requires three elements to be present: consideration (an amount wagered), risk (chance), and a prize. The outcome of the wager is often immediate, such as a single roll of dice, a spin of a roulette wheel, or a horse crossing the finish line, but longer time frames are also common, allowing wagers on the outcome of a future sports contest or even an entire sports season.

The term "gaming" in this context typically refers to instances in which the activity has been specifically permitted by law. The two words are not mutually exclusive; i.e., a "gaming" company offers (legal) "gambling" activities to the public and may be regulated by one of many gaming control boards, for example, the Nevada Gaming Control Board. However, this distinction is not universally observed in the English-speaking world. For instance, in the United Kingdom, the regulator of gambling activities is called the Gambling Commission (not the Gaming Commission). The word gaming is used more frequently since the rise of computer and video games to describe activities that do not necessarily involve wagering, especially online gaming, with the new usage still not having displaced the old usage as the primary definition in common dictionaries. "Gaming" has also been used euphemistically to circumvent laws against "gambling". The media and others have used one term or the other to frame conversations around the subjects, resulting in a shift of perceptions among their audiences.

Screening in economics refers to a strategy of combating adverse selection – one of the potential decision-making complications in cases of asymmetric information – by the agent(s) with less information.

For the purposes of screening, asymmetric information cases assume two economic agents, with agents attempting to engage in some sort of transaction. There often exists a long-term relationship between the two agents, though that qualifier is not necessary. Fundamentally, the strategy involved with screening comprises the “screener” (the agent with less information) attempting to gain further insight or knowledge into private information that the other economic agent possesses which is initially unknown to the screener before the transaction takes place. In gathering such information, the information asymmetry between the two agents is reduced, meaning that the screening agent can then make more informed decisions when partaking in the transaction. Industries that utilise screening are able to filter out useful information from false information in order to get a clearer picture of the informed party. This is important when addressing problems such as adverse selection and moral hazard. Moreover, screening allows for efficiency as it enhances the flow of information between agents as typically asymmetric information causes inefficiency.

In game theory, normal form is a description of a game. Unlike extensive form, normal-form representations are not graphical per se, but rather represent the game by way of a matrix. While this approach can be of greater use in identifying strictly dominated strategies and Nash equilibria, some information is lost as compared to extensive-form representations. The normal-form representation of a game includes all perceptible and conceivable strategies, and their corresponding payoffs, for each player.

In static games of complete, perfect information, a normal-form representation of a game is a specification of players' strategy spaces and payoff functions. A strategy space for a player is the set of all strategies available to that player, whereas a strategy is a complete plan of action for every stage of the game, regardless of whether that stage actually arises in play. A payoff function for a player is a mapping from the cross-product of players' strategy spaces to that player's set of payoffs (normally the set of real numbers, where the number represents a cardinal or ordinal utility—often cardinal in the normal-form representation) of a player, i.e. the payoff function of a player takes as its input a strategy profile (that is a specification of strategies for every player) and yields a representation of payoff as its output.