Description: Axel Fernandes's blog
Game theory and the Berge equilibrium are two concepts that have a significant impact on our lives, the business world, and the economy. Game theory is a mathematical study of decision-making and behavior in strategic situations, while the Berge equilibrium is a concept in game theory that describes the situation where all players in a game make optimal decisions given the decisions of the other players. Together, they help to explain why we make certain choices and how those choices can impact the broader
The idea of game theory has been around since the mid-20th century when it was first introduced by mathematician John Nash. Since then, game theory has been applied to various fields, including economics, political science, and biology. The basic idea behind game theory is that it models decision-making situations as games, where each player is trying to achieve their desired outcome. The players must take into account the actions of the other players and make their decisions accordingly.
The Berge equilibrium is a specific outcome in game theory where all players in a game are making their optimal decisions given the decisions of the other players. In other words, no player has an incentive to change their strategy, as doing so would result in a worse outcome for them. This equilibrium can be reached through various types of games, such as the prisoner's dilemma or the stag hunt game.