Coursera Game Theory Explained


Game theory comes from a branch of mathematics. It is concerned with analyzing strategies that would be used for handling a competitive situation, applying when the outcome of a choice depends on the actions of other participants. It is a theory that is often applied when nations are at war, in business growth, and can even apply to biology.

On a small scale, the analysis that a player performs when playing a game like chess or checkers is much like game theory as well.

The Coursera game theory is a course that can be taken to review this theory. Created by the University of British Columbia and Stanford University, it is a course that is well-suited for research professionals, practitioners, or students who would like to understand more about the logic behind strategic thinking and interactions.

Different Types of Game Theories

There are several different types of game theories that can be studied. Each game type focuses on a logical approach to create a winning strategy. Although there are far too many types to specifically name, here are some of the most commonly studied types and the benefits derivied from its study.

Cooperative and Non-cooperative. Games are cooperative if players are contracted to work together. They are non-cooperative if players are not allowed to form an alliance or agreements must be self-enforced. This game type looks at bargaining, payoffs, and the structure of relationships to create a winning scenario.

Symmetric and Asymmetric. In a symmetric game, the payoff is based on playing a specific strategy without regard to who is actually playing. Games where players could be freely switched, but the outcome would still be the same, are symmetric. An asymmetrical game type does not allow for identical strategy sets, but the outcome would still be the same with different players.

Zero Sum and Non-Zero-Sum. In this theory, the players are not given the option to increase or decrease their available resources. The total benefit to all players, for every strategy combination, always adds to zero. Poker is zero sum game because a player wins the exact amount that another player loses. In a non-zero-sum game, gains can be achieved, which means wins do not need to correspond with losses.

Simultaneous and Sequential. With this theory, the moves of both players take place at the same time. In some forms of simultaneous theory, the moves may occur sequentially, but because the later player is unaware of the move, it is effectively simultaneous. In a sequential game, later players have some knowledge about the actions taken by the other player.

Perfect and Imperfect. This type of game is a subset of the sequential game theory. Some players may know the exact move and the reasons behind the move that a first player takes. That allows them to respond with a move of their own. That is perfect sequential game theory. For imperfect sequential game theory, there is some level of awareness or knowledge of the move, but not complete knowledge.

Combinatorial. This game theory relies on multiple moves to determine the optimal strategy to find success. A game like chess, for example, evolves over time because there are more moves in the beginning to predict that moves at the end of the game. Complex structures at the beginning of the game have complex structures which have no predictable outcome to achieve an optimal strategy.

Infinite Length. For this game theory, there is no set definition of “success.” This takes the restraints off the predictive factors of the theory, but also prevents a payoff until all moves have been completed. In this theory, the importance is placed on having a winning strategy instead of executing that strategy.

Why Do We Study Game Theory?

Whether you take advantage of the Coursera game theory course or you study this idea on your own, the advantage of doing so is to gain insight into behaviors. People and animals behave certain ways because the behavior is triggered by a thought or a feeling. Thoughts and feelings are triggered by internal and external triggers.

If it is cold outside, an animal might behave differently than when it is hot outside. If a person goes grocery shopping when they feel hungry, their behaviors at the store are different than if they go shopping when they are not hungry.

By understanding the behaviors, we can understand the feelings. That allows us to identify triggers. When those triggers can be identified in a two-player game, then you have an advantage. You can initiate a trigger, create a thought or feeling, and then produce a predictable behavior.