Example 1: Increasing Employee Participation in a Public Sector Organization (O’brien, 2002)
Game Theory
History
Mr. John Von Neumann and Oskar Morgenstern were the founders of mathematical theory of games. They firstly develop this game theory in the 1940s however the application of this theory was limited to only Parlour Games. The game theory then illustrated in the Oscar-winning movie A Beautiful Mind, this movie transmuted this theory to a more generic method which enable us to analyse the Win-Win or Lose-Lose scenarios and Win-Lose scenarios as well. The core of this theory was the question that should we Compete or Cooperate?
Introduction
Game theory is a branch of economics that studies the decision in which to succeed an individual has to take in to account the decisions taken by the other agents involved in the situation. Game theoryandmathematical studyhas not been usedexclusively inthe economy butin management,strategy, psychology orbiology.
Ingame theorywe haveto ask ourselveswhat we will do, we have toask ourselves whatwe willdo consideringwhatotherswillthink, thinkingthey will actas they thinkthey are going tobeour actions. Game theoryhas been used inmany business decisions, economic, politicalor evento winplaying poker.
To graphin game theoryare often usedmatrices(also called normal form)and decision treesas toolsto better understand the reasoning that lead toone point or another. Though,the gamescan be solvedusingmathematics, it is usually quitesophisticatedenough togo into depth.
The Prisoner's Dilemma
The prisoner's dilemmaisthe most typical exampleofgame theory.Supposetwo peoplearrestedfor minor offensesthatwould costthemeachtwo years in prison. They knowthey have committeda worse,butneed proof, suppose a statement by one ofthe two.
If bothbetray theother forsix yearsfelonygoto jail. If onebetraysthe other does not, the informerwill bea year forworkandthe other will goten years forthe crime. Given thatprisonerscannotcommunicate with each other(they are inseparate rooms)what will happen?
Supposethat we are oneofthe two
History
Mr. John Von Neumann and Oskar Morgenstern were the founders of mathematical theory of games. They firstly develop this game theory in the 1940s however the application of this theory was limited to only Parlour Games. The game theory then illustrated in the Oscar-winning movie A Beautiful Mind, this movie transmuted this theory to a more generic method which enable us to analyse the Win-Win or Lose-Lose scenarios and Win-Lose scenarios as well. The core of this theory was the question that should we Compete or Cooperate?
Introduction
Game theory is a branch of economics that studies the decision in which to succeed an individual has to take in to account the decisions taken by the other agents involved in the situation. Game theoryandmathematical studyhas not been usedexclusively inthe economy butin management,strategy, psychology orbiology.
Ingame theorywe haveto ask ourselveswhat we will do, we have toask ourselves whatwe willdo consideringwhatotherswillthink, thinkingthey will actas they thinkthey are going tobeour actions. Game theoryhas been used inmany business decisions, economic, politicalor evento winplaying poker.
To graphin game theoryare often usedmatrices(also called normal form)and decision treesas toolsto better understand the reasoning that lead toone point or another. Though,the gamescan be solvedusingmathematics, it is usually quitesophisticatedenough togo into depth.
The Prisoner's Dilemma
The prisoner's dilemmaisthe most typical exampleofgame theory.Supposetwo peoplearrestedfor minor offensesthatwould costthemeachtwo years in prison. They knowthey have committeda worse,butneed proof, suppose a statement by one ofthe two.
If bothbetray theother forsix yearsfelonygoto jail. If onebetraysthe other does not, the informerwill bea year forworkandthe other will goten years forthe crime. Given thatprisonerscannotcommunicate with each other(they are inseparate rooms)what will happen?
Supposethat we are oneofthe two