John Nash's Game Theory

John Nash’s Theory of Equilibrium and its applications in Game Theory As two people play a game of rock-paper-scissors, they both weigh out the options of choosing one of the three choices. As they think of which hand gesture to choose, there are unknowingly using game theory to predict the outcome of their choices. Game theory is the mathematical study of how people make rational/irrational decisions or choices in games. John Von Neumann and Oskar Morgenstern invented the modern way people think about game theory in the year 1944, in the almost indecipherable book titled Theory of Games and Economic Behavior (1). Another man who helped to pioneer game theory was John Nash, who is a schizophrenic with a brilliant mind. Sylvia Nasar wrote a

Governing dynamics as described by Crowe in the film, “Adam Smith said, the best result comes from everyone in the group doing what is best for oneself. That is incomplete because the best result will come from everyone in the group doing what’s best for themselves, AND, for the group.” This idea later became known as the Nash equilibrium, after its inventor. The scene in which governing dynamics is explained describes Nash and a few friends trying to pick up the prettiest girl in the group. However, Nash says “…if we all go for the blonde then we block each other and not a single one of us is going to get her” and he then informs his friends how they all can successfully get a girl with the idea of governing dynamics. If they all do what is best for themselves and the group then they all will potentially get a girl. (4) In this over-dramatized example of Nash’s life, the scene has some truth to it. In that, Nash did come up with governing dynamics, however not at a bar with his

Volunteer’s dilemma consists of a person having to volunteer to do something that will benefit everyone and it does not matter who that someone is. However, if no one volunteers than everybody is in trouble. As famously seen when nobody volunteered to call the police in the 1964 murder case of Catherine Genovese when 38 people either saw of knew what was happening to her, in this instance, nobody volunteered and the outcome was the death of a young woman (Poundstone pg. 201-203). One of the reasons why nobody called or helped is because they thought someone else was going to