Answer to Question #182540 in Operations Research for Keitumetse

Question

Critically examine Discovery’s use of game theory. Provide two examples of game theory as used by Discovery as a whole or any business units.

Answer 1

Discovery use of Game Theory

Game theory is an idea of solving conflicts using gaming strategies. Once there is a conflict between two parties, the game theory assumes that the parties are rational enough. It then presents a game strategy where every individual choice dictates the outcome of the dispute. Players must follow the rules of the game for it to apply. Also, the game theory presents numerous assumptions basing on the conflict available and the players (Myerson, 2013).

Good examples of the discovery application of game theory are the the-zero-sum game and the non-zero-sum games. In the zero-sum game, there is a constant payoff for each player. The winning of one player denotes the loss of the other player in the same game. A good example is an election campaign game, where only one person must-win for a single elective position. In the non-zero-sum games, both players can either gain or lose the game. For example, two couples may want to watch movies of their preferences, but since they must go together, they may choose not to go at all or go together when it is suitable for all of them (Myerson, 2013)

References

Myerson, R. B. (2013). Game theory. Harvard university press.