Game Theory

Game Theory
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Game Theory
Game theory provides tools for the analysis of situations in which players make interdependent decisions. The interdependence leads to players considering the possible decisions of the others while formulating their strategies. On the other hand, a solution to a game illustrates the players’ optimal decisions which at times may have mixed interests, similar, or opposed outcomes that arise from the strategies adopted. Game theory is applied in various sectors, for example, international relations. In international relations, countries have a military, and in this game, each player anticipates the moves of their opponents. Game theory supplements the strategic decision-making process and the aspects that the players control since they do not occur by chance but interact to affect the results. Different games apply to different situations which contain various concepts that lead to the solution of the game. The analyses of different concepts lead to the solution of the decision problem during optimization.
The set of players, in this case, are two countries N and S which adopt different strategies during the time of war or conflict. The two nations’ strategic interactions and their actions affect the outcome of each country, and they are aware of that. However, the countries have well-defined objectives over the underlying outcomes which make them adopt the best strategies to pursue them. During times of war, the two countries cannot communicate and therefore, they have to make military decisions without knowing the strategies adopted by their opponents.

The two countries are rational, and they do not take action whenever there is another that would give a better outcome regardless of the strategy adopted by their opponent. Country N can decide to use nuclear weapons in which the opponent, country S, could not be aware. The country N by using nuclear armament could win the war and therefore gains the most while the loser gains little.
On the other hand, if the country S would pursue the nuclear armament strategy and N does not, it would mean winning for S while N would lose. If we would assign a payoff of lets 10 to country S, and zero to S, it would mean a gain for S by winning the war while N gains nothing. Both sides might pursue nuclear armament which would lead to a war and both sides might stand to lose. For instance, if the war would be of higher intensity, both sides would lose substantially. On the other hand, both countries might decide to cooperate, and therefore none of them applies nuclear weapons which would mean that they achieve a better payoff. However, one country may double cross the other and arm itself which would lead to an outcome of zero to the unarmed nation.
It is evident that the choice of one country affects the other and the objective of each player is to maximize the outcome of the war. The victory of one country does not inhibit the other from adopting new decisions, but it activates the opponent to employ new policies that would produce positive outcomes. In this case, if both nations decide to cooperate, they expose themselves to a double-cross situation. The game, therefore, puts pressure on both countries in the absence of mutual trust on each player to become non-cooperative. The situation sets the scene to nuclear armament arms race while the purpose of each country is to gain over the other.