Theory and Practical Application Based on Game Theory

Abstract

Game theory refers to the method in which one of the interacting parties obtains the decision-making information of the other party and uses it to influence the other party in turn. Therefore, game theory is also called "game theory". Game theory can be divided into cooperative game and non-cooperative game. In recent decades, the theory of game theory has developed rapidly with the establishment of John Nash and has been applied to many fields such as medical, engineering, military, and business. In this paper, the author starts from the basic definition of game theory and analyze the prisoner's dilemma, concordance fallacy, median voter theorem, Gounod model, Bertrand model, iterative deletion of dominated strategy, etc. through specific cases. The research results show that game theory has been widely used in the economy. For bilateral games, the results of Nash equilibrium are unstable. The research in this paper broadens the theory of game theory and has important practical significance for the application research of game theory.