2. Intelligent Interaction Modelling: Game Theory

Game theory is a mathematical tool for supporting decision making in a multiple players situation where one player’s utility will be determined not only by his own decision, but also by other players’ decisions. An illustrative example of this situation is the Rock/Scissors/Paper game (“RSP” game). In an RSP game, whether a player wins or loses depends on both what he plays and what his opponent plays. This is a well-known game between mostly children with very simple rules. Two ‘players’ hold their right hands out simultaneously at an agree signal to represent a rock (closed fist), a piece of paper (open palm), or a pair of scissors (first and second fingers held apart). If the two symbols are the same, it’s a draw. Otherwise rock blunts scissors, paper wraps rock, and scissors cut paper, so the respective winners for these three outcomes are rock, paper and scissors. The RSP game is what is called a ‘two-player zero-sum non-cooperative’ game. There are obviously many other types of game and the field of game theory is very powerful to provide (mathematical) insights into strategic decision-making.