354: Game theory

The boys drink and review Partake IPA, a no-alcohol beer, then discuss game theory. Game theory is an attempt to express the calculations that go on in a game as mathematics. It makes certain assumptions. 1. The game has to include multiple players 2. The players must interact with each other 3. There needs to be a reward 4. You assume the players act rationally 5. You assume the players act in their own personal interest Those things are not always true in real life. One goal of game theory is to figure out what the best choice is no matter what the other player does. This is called the "Nash equilibrium." Two common games in game theory are The Prisoner's Dilemma and The Ultimatum. "The Ultimatum" game shows that people don't always act rationally in their decisions.