Institute Of Foreign Trade & Management

Department Of Management Studies Mba Ist Year

Session-2010-11

Assignment Copy
Operation Research

Submitted To: Dr. Nisha Agarwal

Submitted By:
Lalit Sirohi Manish Pathak Lokendra Singh Lovnish Bhatnagar

Introduction Game theory Game theory is a type of decision theory in which ones choice of action is determined after taking into account all possible alternatives available to an opponent playing the same game, rather than just by the possibilities of several outcomes. The mathematical analysis of competitive problems is fundamentally based upon the minimax (maximin) criterion of j. Von neumann(called the father of game theory).this criterion implies the assumption of rationality from which it is argued that each player will act so as to maximize his minimum gain or minimize his maximum loss. The game theory has only been capable of analyzing very simple competitive situations. Thus, there has been a great gap between what the theory can handle and most actual competitive situations in industry and elsewhere.

Game is defined as an activity between two or more persons involving activities by each person according to a set of rules, at the end of which each person receives some benefit or satisfaction or suffers loss (negative benefit). The set of rules defines the game. Going through the set of rules once by the participants defines a play. All the decision making situations can be grouped in three categories. They are: 1) Decision making under certainty, 2) Decision making under risk, and 3) Decision making under uncertainty It has the following properties: 1) There is a finite number of competitors (participants) called players. 2) Each player has a finite number of strategies (alternatives) available to him. 3) A play of the game takes place when each player employs his strategy.

4) Every game results in an outcome, e.g., loss or gain or a draw, usually called payoff, to some player. Game theory is a body of knowledge which is concerned with the study of decision-making in situations where two or more rational opponents are involved under conditions of competition and conflicting interest. A game refers to a situation in which two or more players are competing. It involves the players (the decision makers) who have different goals or objectives and whose fates are interwined. Game is a formal description of strategic situation. It describes both conflict and cooperation. Assumptions 1) The players act rationally and intelligently. 2) Each player has available to him a finite set of possible courses of action. 3) The players attempt to maximize profit and minimize losses. 4) All element information is known to each player.

5) The players make individual decisions without direct communication. 6) The players simultaneously select their respective courses of action. 7) The payoff is fixed and known in advance. Characteristics of game theory

There can be various types of games. They can be classified on the basis of the following characteristics. (1) Chance of strategy: if in a game, activities are determined by skill, it is said to be a game of strategy; if they are determined by chance, it is a game of chance. In general, a game may involve game of strategy as well as a game of chance. Simplest models of games of strategy will be considered. (2) Number of persons: a game is called an nperson game if the number of persons playing is n. The persons means an individual or a group aiming at a particular objective. (3) Number of activities: these may be finite or infinite. (4) Number of alternatives (choices) available to each person in a particular activity may also be finite or infinite. A finite game has a finite number of activities, each involving a finite number of alternatives, otherwise the game is said to be infinite.

(5) Information to the players about the past activities of other players is completely available, partly available, or not available at all. (6) Pay off: a quantitative measure of satisfaction a person gets at the end of each play is called a payoff. It is a real-valued function of variables in the game.

Game programming
Counting game does not depend on opponents choice Tic-tac-toe, chess, etc. Depend on opponents moves You want a move that has the best chance of winning However, chances of winning depend on opponents subsequent moves You choose a move where the worst-case winning chance (opponents best play) is the best: max-min Min-max principle says that this strategy is equal to opponents min-max strategy

The worse your opponents best move is, the better is your move Application of game theory
1)

In political science:-the application of game theory to political science is focused in the overlapping areas of fair division, political economy, public choice, positive political theory, and social choice theory. In each of these areas, researchers have developed game theoretic models in which the players are often voters, states, special interest groups, and politicians. For early examples of game theory applied to political science, see the work of anthony downs. In his book an economic theory of democracy, he applies the hotelling firm location model to the political process. In the downsian model, political candidates commit to ideologies on a one-dimensional policy space. The theorist shows how the political candidates will converge to the ideology preferred by the median voter.

A game-theoretic explanation for democratic peace is that public and open debate in democracies send clear and reliable information regarding their intentions to other states. In contrast, it is difficult to know the intentions of nondemocratic leaders, what effect concessions will have, and if promises will be kept. Thus there will be mistrust and unwillingness to make concessions if at least one of the parties in a dispute is a nondemocracy. 2) In economics and business:- economics have long used game theory to analyze a wide array of economic phenomena, including auctions, bargaining, duopolies, fair division, oligopolies, social network formation, and voting system. This research usually focuses on particular sets of strategies known as equilibria in games. These "solution concepts" are usually based on what is required by norms of rationality. In non-cooperative games, the most famous of these is the nash equilibrium. A set of strategies is a nash equilibrium if each represents a best response to the other strategies. So, if all

the players are playing the strategies in a nash equilibrium, they have no unilateral incentive to deviate, since their strategy is the best they can do given what others are doing. The payoffs of the game are generally taken to represent the utility of individual players. Often in modeling situations the payoffs represent money, which presumably corresponds to an individual's utility. This assumption, however, can be faulty. A prototypical paper on game theory in economics begins by presenting a game that is an abstraction of some particular economic situation. One or more solution concepts are chosen, and the author demonstrates which strategy sets in the presented game are equilibrium of the appropriate type. Naturally one might wonder to what use should this information be put. Economists and business professors suggest two primary uses: descriptive and prescriptive 3) In biology:- unlike economics, the payoffs for games in biology are often interpreted as

corresponding to fitness. In addition, the focus has been less on equilibrium that correspond to a notion of rationality, but rather on ones that would be maintained by evolutionary forces. . The best known equilibrium in biology is known as the evolutionarily stable strategy (or ess), and was first introduced in (smith & price 1973). Although its initial motivation did not involve any of the mental requirements of the nash equilibrium, every ess is a nash equilibrium. . Biologists have used the game of chicken to analyze fighting behavior and territoriality. Maynard smith, in the preface to evolution and the theory of games, writes, "paradoxically, it has turned out that game theory is more readily applied to biology than to the field of economic behaviour for which it was originally designed". Evolutionary game theory has been used to explain many seemingly incongruous phenomena in nature One such phenomenon is known as biological altruism. This is a situation in which an

organism appears to act in a way that benefits other organisms and is detrimental to it self. This is distinct from traditional notions of altruism because such actions are not conscious, but appear to be evolutionary adaptations to increase overall fitness. Examples can be found in species ranging from vampire bats that regurgitate blood they have obtained from a night's hunting and give it to group members who have failed to feed, to worker bees that care for the queen bee for their entire lives and never mate, to vervet monkeys that warn group members of a predator's approach, even when it endangers that individual's chance of survival. All of these actions increase the overall fitness of a group, but occur at a cost to the individual. Evolutionary game theory explains this altruism with the idea of kin selection. Altruists discriminate between the individuals they help and favor relatives. Hamilton's rule explains the evolutionary reasoning behind this selection with the equation c<b*r where the cost ( c ) to the altruist must be less than the benefit ( b ) to the recipient multiplied by the coefficient of

relatedness ( r ). The more closely related two organisms are causes the incidences of altruism to increase because they share many of the same alleles. This means that the altruistic individual, by ensuring that the alleles of its close relative are passed on, (through survival of its offspring) can forgo the option of having offspring itself because the same number of alleles are passed on. Helping a sibling for example (in diploid animals), has a coefficient of , because (on average) an individual shares of the alleles in its sibling's offspring. Ensuring that enough of a siblings offspring survive to adulthood precludes the necessity of the altruistic individual producing offspring. The coefficient values depend heavily on the scope of the playing field; for example if the choice of whom to favor includes all genetic living things, not just all relatives, we assume the discrepancy between all humans only accounts for approximately 1% of the diversity in the playing field, a co-efficient that was in the smaller field becomes 0.995. Similarly if it is considered that information other than that of a genetic nature (e.g. Epigenetics, religion,

science, etc.) Persisted through time the playing field becomes larger still, and the discrepancies smaller.

In computer science and logic:- game theory has come to play an increasingly important role in logic and in computer science. Several logical theories have a basis in game semantics. In addition, computer scientists have used games to model interactive computations. Also, game theory provides a theoretical basis to the field of multi-agent systems. Separately, game theory has played a role in online algorithms. In particular, the k-server problem, which has in the past been referred to as games with moving costs and requestanswer games (ben david, borodin & karp et al. 1994). Yao's principle is a game-theoretic technique for proving lower bounds on the computational complexity of randomized algorithms, and especially of online algorithms.
4)

The field of algorithmic game theory combines computer science concepts of complexity and algorithm design with game theory and economic theory. The emergence of the internet has motivated the development of algorithms for finding equilibrium in games, markets, computational auctions, peer-to-peer systems, and security and information markets. Other computer science applications: Internet Routing Job scheduling Competition in client-server systems Peer-to-peer systems Cryptology Network security Sensor networks Game programming

5)

Philosophy

Game theory has been put to Stag Hare several uses in philosophy. Responding to two papers Stag 3, 3 0, 2 by w.v.o. Hare 2, 0 2, 2 quine (1960, 1967), lewis (1969) used game theory to Stag hunt develop a philosophical account of convention. In so doing, he provided the first analysis of common knowledge and employed it in analyzing play in coordination games. In addition, he first suggested that one can understand meaning in terms of signaling games. This later suggestion has been pursued by several philosophers since lewis (skyrms (1996), grim, kokalis, and alai-tafti et al. (2004)). Following lewis (1969) game-theoretic account of conventions, ullmann margalit (1977) and bicchieri (2006) have developed theories of social norms that define them as nash equilibrium that result from transforming a mixed-motive game into a coordination game. Game theory has also challenged philosophers to think in terms of interactive epistemology: what it means for a collective to have common beliefs or knowledge, and what are the

consequences of this knowledge for the social outcomes resulting from agents' interactions. Philosophers who have worked in this area include bicchieri (1989, 1993), skyrms (1990), and stalnaker (1999). In ethics, some authors have attempted to pursue the project, begun by thomas hobbes, of deriving morality from self-interest. Since games like the prisoner's dilemma present an apparent conflict between morality and selfinterest, explaining why cooperation is required by self-interest is an important component of this project. This general strategy is a component of the general social contract view in political philosophy (for examples, see gauthier (1986) and kavka (1986). Other authors have attempted to use evolutionary game theory in order to explain the emergence of human attitudes about morality and corresponding animal behaviors. These authors look at several games including the prisoner's dilemma, stag hunt, and the nash bargaining game as providing an explanation for the emergence of attitudes about morality (see, e.g.,

skyrms (1996, 2004) and sober and wilson (1999)). Some assumptions used in some parts of game theory have been challenged in philosophy; psychological egoism states that rationality reduces to self-interesta claim debated among philosophers. Types of game theory:- games can be of several types. Important ones are follows. 1) Two-person games and n-person games:games with an arbitrary, but finite number of players are often called n-person games. Evolutionary game theory considers games involving a population of decision makers, where the frequency with which a particular decision is made can change over time in response to the decisions made by all individuals in the population. In biology, this is intended to model (biological) evolution, where genetically programmed organisms pass along some of their strategy programming to their offspring. In economics, the same theory is

intended to capture population changes because people play the game many times within their lifetime, and consciously (and perhaps rationally) switch strategies. 2) Zero-sum and nonzero-sum

Zero-sum games are a A 1, 1 3, 3 special case of constantsum games, in which B 0, 0 2, 2 choices by players can A zero-sum game neither increase nor decrease the available resources. In zerosum games the total benefit to all players in the game, for every combination of strategies, always adds to zero (more informally, a player benefits only at the equal expense of others). Poker exemplifies a zero-sum game (ignoring the possibility of the house's cut), because one wins exactly the amount one's opponents lose. Other zero-sum games include matching pennies and most classical board games including go and chess.

Many games studied by game theorists (including the famous prisoner's dilemma) are non-zero-sum games, because some outcomes have net results greater or less than zero. Informally, in non-zero-sum games, a gain by one player does not necessarily correspond with a loss by another. Constant-sum games correspond to activities like theft and gambling, but not to the fundamental economic situation in which there are potential gains from trade. It is possible to transform any game into a (possibly asymmetric) zero-sum game by adding an additional dummy player (often called "the board"), whose losses compensate the players' net winnings.

3) Cooperative or non-cooperative A game is cooperative if the players are able to form binding commitments. For instance the legal system requires them to adhere to their

promises. In non cooperative games this is not possible. Often it is assumed that communication among players is allowed in cooperative games, but not in non cooperative ones. This classification on two binary criteria has been rejected. Of the two types of games, non cooperative games are able to model situations to the finest details, producing accurate results. Cooperative games focus on the game at large. Considerable efforts have been made to link the two approaches. The so-called nashprogramme has already established many of the cooperative solutions as non cooperative equilibrium. Hybrid games contain cooperative and noncooperative elements. For instance, coalitions of players are formed in a cooperative game, but these play in a non-cooperative fashion. 4) Symmetric and asymmetric E F E F 1, 2 0, 0 0, 0 1, 2

A symmetric game is a game An asymmetric where the payoffs for playing a game particular strategy depend only on the other strategies employed, not on who is playing them. If the identities of the players can be changed without changing the payoff to the strategies, then a game is symmetric. Many of the commonly studied 22 games are symmetric. The standard representations of chicken, the prisoner's dilemma, and the stag hunt are all symmetric games. Some scholars would consider certain asymmetric games as examples of these games as well. However, the most common payoffs for each of these games are symmetric. Most commonly studied asymmetric games are games where there are not identical strategy sets for both players. For instance, the ultimatum game and similarly the dictator game have different strategies for each player. It is possible, however, for a game to have identical strategies for both players, yet be asymmetric. For example, the game pictured to the right is asymmetric despite having identical strategy sets for both players.

5) Simultaneous and sequential simultaneous games are games where both players move simultaneously, or if they do not move simultaneously, the later players are unaware of the earlier players' actions (making them effectively simultaneous). Sequential game (or dynamic games) are games where later players have some knowledge about earlier actions. This need not be perfect information about every action of earlier players; it might be very little knowledge. For instance, a player may know that an earlier player did not perform one particular action, while he does not know which of the other available actions the first player actually performed. The difference between simultaneous and sequential games is captured in the different representations discussed above. Often, normal form is used to represent simultaneous games, and extensive form is used to represent sequential ones. The transformation of extensive to normal form is one way, meaning

that multiple extensive form games correspond to the same normal form. Consequently, notions of equilibrium for simultaneous games are insufficient for reasoning about sequential games; see subgame perfection. 6) Perfect information games imperfect information games and

An important subset of sequential games consists of games of perfect information. A game is one of perfect information if all players know the moves previously made by all other players. Thus, only sequential games can be games of perfect information, since in simultaneous games not every player knows the actions of the others. Most games studied in game theory are imperfect-information games, although there are some interesting examples of perfect-information games, including the ultimatum game and centipede game.

Recreational games of perfect information games include chess, go, and mancala. Many card games are games of imperfect information, for instancepoker or contract bridge. Perfect information is often confused with complete information, which is a similar concept. Complete information requires that every player know the strategies and payoffs of the other players but not necessarily the actions. Games of incomplete information can be reduced however to games of imperfect information by introducing "moves by nature".

Representation of games The games studied in game theory are welldefined mathematical objects. A game consists of a set of players, a set of moves (or strategies) available to those players, and a specification of payoffs for each combination of strategies. Most cooperative games are presented in the characteristic function form, while the extensive and the normal forms are used to define non cooperative games.

Factors/models:1) Number of players:- a player is an agent who makes decisions in game. If a game involving only two players (competitors), then it is called a two-person game. However, if the no. Of players is more than two, the game is referred to as n-person game. 2) Sum of gains and losses:- if in a game the gains to one player are exactly equal to the losses to another player, so that sum of the gains and losses equal zero, then the game is said to be a zero-sum game. 3) Strategy:- the strategy for a player is the list of all possible action, that he will take for every payoff that might arise. It assumes that the rules governing the choices are known in advance to the players. Generally two types of strategies are employed by players in a game.

Pure and mixed strategies

A pure strategy provides a complete definition of how a player will play a game. In particular, it determines the move a player will make for any situation he or she could face. A player's strategy set is the set of pure strategies available to that player. A mixed strategy is an assignment of a probability to each pure strategy. This allows for a player to randomly select a pure strategy. Since probabilities are continuous, there are infinitely many mixed strategies available to a player, even if their strategy set is finite. Of course, one can regard a pure strategy as a degenerate case of a mixed strategy, in which that particular pure strategy is selected with probability 1 and every other strategy with probability 0. A totally mixed strategy is a mixed strategy in which the player assigns a strictly positive probability to every pure strategy. (totally mixed strategies are important for equilibrium refinement such as trembling hand perfect equilibrium.)

Mixed strategy A A B 1, 1 0, 0 B 0, 0 1, 1

Consider the payoff matrix pictured to the right (known as a coordination game). Here one player chooses the row and the other chooses a column. The row player receives the first payoff, the column player the second. If row opts to play a with probability 1 (i.e. Play a for sure), then he is said to be playing a pure strategy. If column opts to flip a coin and play a if the coin lands heads and b if the coin lands tails, then she is said to be playing a mixed strategy, and not a pure strategy.

How to find nash equilibrium?

1.note a distinction between pure strategies - the players choose one or other move with certainty - and mixed strategies - the players choose high price with a 60% probability and low price with a 40% probability. Mixed strategies are too complex to deal with here: see dixit and sneath (1999) for a non-technical introduction For pure strategies Look for dominant strategies If dominant strategies are not to be found, look for dominated strategies and delete them For zero sum games use the minimax criterion: pick the strategy for each player for which the worst outcome is the least worst Cell-by-cell inspection: examine every cell and for each one ask(does either player wish to move from this cell, given what the other has done?) for example
Company Bs Actions No Dominant Strategies: Eliminate Dominated Strategies Company As Actions High Price Medium Price Low Price 100A,100B 120A, 65B 60A, 65B 65 A, 120B 80A,80B 60A, 55B 65A,60B 55A, 60B 50A,50B

High Price Medium Price Low Price

Saddle point:In mathematics, a saddle point is a point in the domain of a function that is a stationary point but not a local extreme. The name derives from the fact that in two dimensions the surface resembles a saddle that curves up in one direction, and curves down in a different direction (like a horse saddle or a mountain pass). In terms of contour lines, a saddle point can be recognized, in general, by a contour that appears to intersect itself. For example, two hills separated by a high pass will show up a saddle point, at the top of the pass, like a figure-eight contour line. Mathematical discussion A simple criterion for checking if a given stationary point of a real-valued function f(x, y) of two real variables is a saddle point is to compute the function's hessian matrix at that point: if the hessian is indefinite, then that point is a saddle point. For example, the hessian matrix of the function z = x2

y2 at the stationary point (0, 0) is the matrix Which is indefinite. Therefore, this point is a saddle point. This criterion gives only a sufficient condition. For example, the point (0, 0) is a saddle point for the function z = x4 y4, but the hessian matrix of this function at the origin is the null matrix, which is not indefinite. In the most general terms, a saddle point for a smooth function (whose graph is a curve, surface or hyper surface) is a stationary point such that the curve/surface/etc. In the neighborhood of that point is not entirely on any side of the tangent space at that point. The plot of y = x3 with a saddle point at 0 In one dimension, a saddle point is a point which is both a stationary point and a point of inflection. Since it is a point of inflection, it is not a local extreme Other uses In dynamical systems, a saddle point is a periodic point whose stable and unstable manifolds have a dimension that is not zero. If the dynamic is given

by a differentiable map f then a point is hyperbolic if and only if the differential of n (where n is the period of the point) has no eigen value on the (complex) unit circle when computed at the point. In a two-player zero sum game defined on a continuous space, the equilibrium point is a saddle point. A saddle point is an element of the matrix which is both the largest element in its column and the smallest element in its row. For a second-order linear autonomous systems, a critical point is a saddle point if the characteristic equation has one positive and one negative real eigen value

Graphical model Undirected graph g capturing local interactions Each player represented by a vertex N_i(g) = neighbors of i in g (includes i) Assume: m_i(x) expressible as m_i(x) over only n_i(g) Graphical game: (g,{m_i})

 Compact representation of game Exponential in max degree (<< # of players) Exs: geography, organizational structure, networks Analogy to bayes nets: special structure How useful is game theory? A powerful tool, but Outcomes are very sensitive to the protocols There may be many equilibrium When using it to model real life cases there may be many different options - a model may be devised to fit almost any fact saloner 1991 Analysis works backwards - instead of theory to hypotheses to empirical data empirical data to theory Sometimes players commonsense tells them what to do despite multiple equilibrium

 The requirement that firms do as expected (in rollback, for instance) Where do the protocols come from, how do they change? Ge and westinghouse found new protocols which helped them to collude - why then and not before? An overall judgment? Some very useful insights Nash equilibrium concept Collusion; the price matching result Entry deterrence; the importance of credibility Cournot and bertrand provide determinate solutions for oligopoly The degree of complexity involved may limit its usefulness as a predictive tool The degree of rationality which has to be assumed on the part of players is uncomfortable

Limitations of game theory:-

1- The assumption that the players have the knowledge about their own payoffs and payoffs of others is rather unrealistic. He can only make a guess of his own and his rivals strategies. 2- as the number of players increase in the game, the analysis of the gaming strategies become increasingly complex and difficult. 3- the assumptions of maximin and minimax show that the players are risk-averse and have complete knowledge of the strategies. These do not seem practical. 4- rather than each player in an oligopoly situation working under uncertain conditions, the players will allow each other to share the secret of business in order to work out a collusion, then the mixed strategies are not very useful.

Questionnaire

1. The game theory has the following drawbacks except a) In realistic settings, many of the assumption made for theoretical solutions are missing b) Outside parties, other than the players, may exert an influence on the game c) A situation where one decision-maker is in competition with another is unlikely to arise in real life d) Pay-offs are difficult to express in quantitative terms 2. Two-person zero-sum game means that the a) Sum of losses to one player equals the sum of gains to other b) Sum of losses to one player is not equal to the sum of gains to other c) Both (a) and (b) d) None of the above

3. Game theory models are classified by the a) Number of players b) d) Sum of all payoffs All of the above c) Number of strategies

4. A game is said to be fair, if a) Both upper and lower values of the game are same and zero b) Upper and lower values of the game are not equal c) Upper value is more than lower value of the game d) None of the above 5. What happens when maximin and minimax values of the game are same

a) No solution exists b) d) Solution is mixed None of the above c) saddle point exists 6. A mixed strategy game can be solved by a) Algebraic method b) d) Matrix method All of the above c) Graphical method

7. The payoff value for which each player in a game always selects the same strategy is called the a) Saddle point b) d) Equilibrium point None of the above c) Both (a) and (b) 8. Games which involve more than two players are called

a) Conflicting games b) d) Negotiable games All of the above c) N-person games 9. When the sum of gains of one player is equal to the sum of losses to another player in a game, this situation is known as a) Biased game b) d) Zero-sum game All of the above c) Fair game

10. When no saddle point is found in a payoff matrix of a game, the value of the game is then found by a) Reducing size of the game to apply algebraic method

b) Knowing joint probabilities of each row and column combination to calculate expected payoff for that combination and adding all such values. c) Both (a) and (b) d) None of the above

11. While creating a pay-off table a) The pay-offs are expressed as gains of the row player b) The pay-offs are expressed as gains of the row player and losses of the column player c) The payoffs are expressed as gains of the row player d) The payoffs are expressed as gains and losses of the column player 12. While using mixed strategies

a) The players must inform each other of the stratehy that they are going to use b) They must use the available strategies equally c) They must use the available strategies accourding to proportions given by the solution and should ensure security and secrecy of their strategy d) They must use only one strategy each 13. A row strategy a is dominated by row strategy b a) When all values of row b are lesser then all corresponding values of row a b) When all values of row b are greater than all corresponding values of row a c) When all highest value of row b is higher then the highest value of row a d) When the lowest value of row b is smaller than the lowest value of row a 14. A saddle point is

a) The highest value in the payoff matrix b) The lowest value in the pay-off matrix c) The minimax value of the rows and the maximin value of the columns d) It is the minimum value in the row and the maximin value of the column in which it lies 15) a strategy for a given player is a (a) set of rules (b) set of functions (c) a & b (d) none of above 16) strategy may be of two kinds(a) pure strategy (b) mixed strategy (c) a & b (d) none of the above 17) the pure strategy is a decision rule always to select a

(a) set of function (b) set of course (c) set of rules (d) particular course of action 18) if i=1 vi=0, then the game is said to be a zero-sum game. 19) a game which is not zero-sum is called (a) zero-sum game (b) two-person game (c) nonzero-sum game (d) none of the above 20) the main characteristics of game theory (a) chance of strategy (b) number of persons (c) number of activities (d) all of the above 21) the mixed strategy is a selection among pure strategies with fixed probabilities. True/false

22) a saddle point of a payoff matrix is the position of such an element in the payoff matrix which is minimum in its rows and maximum in its column. 23) to obtain a solution of a rectangular game, it is feasible to find out : (a) the best strategy for player a (b) the best strategy for player b (c) the value of the game (vrs) (d) all of the above 24) the principle for mixed strategies games are(a) minimax (b) maximin (c) maximum (d) a & b 25) the two dominance strategies are (a) inferior and superior (b) pure (c) none of the above

26) a short-cut matrix method is described below to solve any n * n games quite efficiently, though it provides only on one optimal solution. 27) the types of bidding problems are: (a) open or auction bids (b) closed bids

28) the (m*2) games are also treated in like manner except that the minimax point is the lowest point on the uppermost boundary instead of highest point on the lowest boundary. True / false 29) if mixed strategies are allowed, there always exists a value of the game, v = v = v. 30) if the payoff matrix (vij) has the saddle point (r, s), then the players (a & b) are said to have rth and sth optimal strategies.

31) a saddle point of a payoff matrix is, sometimes, called the equilibrium point of the payoff matrix. 32) a game with only two players is called(a) two-person, zero-sum game (b) zero-sum game (c) non-zero-sum game (d) none of the above 33) the game theory have not only been capable of analyzing very simple competitive situations. True / false 34) How useful is game theory? (a) Outcomes are very sensitive to the protocols (b) There may be many equilibrium

(c)When using it to model real life cases there may be many different options - a model may be devised to fit almost any fact. (d) All of the above 35) Graphical model is (a) Compact representation of game (b) Compact representation of game (c) Exponential in max degree (d) All of the above 36) In a two-player zero sum game defined on a continuous space, the equilibrium point is a saddle point. 37) A saddle point is a periodic point whose stable and unstable manifolds have a dimension that is not zero. 38) The assumption that the players have the knowledge about their own payoffs and payoffs of

others is rather unrealistic. He can only make a guess of his own and his rivals strategies. True / False 39) As the number of players increase in the game, the analysis of the gaming strategies become increasingly complex and difficult. True / False 40) A saddle point is a point which is both a stationary point and a point of inflection. Since it is a point of inflection, it is not a local extreme. True / False