Philosophers are increasingly becoming interested in Game Theory because it provides a way of elucidating the logical difficulty of philosophers such as Hobbes, Rousseau, Kant and other social and political theorists.

Resource Allocation and Networking

Computer network bandwidth can be viewed as a limited resource. The users on the network compete for that resource. Their competition can be simulated using game theory models. No centralized regulation of network usage is possible because of the diverse ownership of network resources.

The problem is of ensuring the fair sharing of network resources. For example, ten Stanford students on the same local network need access to the Internet. Each person, by using their network connection, diminishes the quality of the connection for the other users. This particular case is that of a volunteer's dilemma. That is, if one person abstains from using the network, the other people will be better off, but that person will be worse off.

If a centralized system could be developed which would govern the use of the shared resources, each person would get an assigned network usage time or bandwidth, thereby limiting each person's usage of network resources to his or her fair share.

As of yet, however, such a system remains an impossibility, making the situation of sharing network resources a competitive game between the users of the network and decreasing everyone's utility.


Although the natural world is often thought of as brutal, dog-eat-dog type, cooperation exists between many different species. The reason behind this coexistence can be modeled using game theory. For example, birds called ziczacs enter crocodiles' mouths to eat parasites. This symbiosis allows crocodiles to achieve good oral hygiene and allows the ziczacs to get a decent meal. But any crocodile can easily eat a ziczac (defect). So why don't they? Apparently, over the eons of evolutionary action, the crocodiles and the ziczacs have learned the benefits of cooperation, the "equilibrium point."

Of course, chances are that neither the crocodiles nor the ziczacs rationalize their behavior with game theory. But their behavior can still be modeled using game theory principles.

Artificial Intelligence

One of the marks that differentiates a human from a machine is the human's ability to make independent decisions based on environmental stimuli. Most computer programs that are required to make any sort of a decision are currently pre-programmed with the lists of decisions based on a number of conditions. However, if those conditions are not met in some way or are altered, computers have no way of making decisions they were not programmed to make.

In the future, AI programs may be endowed with the ability to make new decisions unplanned for by their creators. This would require the programs to be able to generate new payoff matrices based on the observed stimuli and experience. A program that is able to do that would be capable of learning and would, in a lot of ways, resemble the human decision-making process.


Many of the interactions in the business world may be modeled using game theory methodology. A famous example is that of the similarity of the price-setting of oligopolies to the Prisoner's Dilemma. If an oligopoly situation exists, the companies are able to set prices if they choose to cooperate with each other. If they cooperate, both are able to set higher prices, leading to higher profits. However, if one company decides to defect by lowering its price, it will get higher sales, and, consequently, bigger profits than its competitor(s), who will receive lower profits. If both companies decide to defect, i.e. lower prices, a price war will ensue, in which case neither company will profit, since it will retain its market share and experience lower revenues at the same time.

Prisoner's dilemma is not the only game theory model which can be used to model economic situations. Other models can be applied to different situations and, in many cases, can suggest the best outcome for all parties concerned.


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