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Problem solving methods in game theory

Elaine Audrey Terry
Atlanta University

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PROBLEM SOLVING METHODS IN GAME THEORY

A THESIS
SUBMITTED TO THE FACULTY OF ATLANTA UNIVERSITY
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR
THE DEGREE OF MASTER OF SCIENCE

BY
ELAINE AUDREY TERRY

DEPARTMENT OF MATHEMATICAL AND COMPUTER SCIENCES

ATLANTA, GEORGIA
JULY, 1988

ABSTRACT
MATHEMATICS
TERRY, ELAINE A.

B.A.

SPELMAN COLLEGE, 1983

PROBLEM SOLVING IN GAME THEORY

Advisor:

Professor Negash Medhin

Thesis dated July, 1988

Game theory is the mathematical theory associated
with winning strategic and non-strategic games.

In order

to win a game, a player must find an optimal strategy to

play.

Strategies may be either pure or mixed.

The latter

is used when there are no pure strategies available

Games that require mixed strategies may be solved by

various methods.
This study is concerned with the basic theory of
games.

Definitions and methods for solving games are

discussed.

The methods for solving involve both pure and

mixed strategies.

The simplex method for solving linear

programming problems is reviewed.

The numerical examples

were solved using the IBM Macintosh with the MacSimplex

package.

ACKNOWLEDGMENTS
I would like to extend sincerest thanks to Dr. Negash
Medhin and Dr. Nazir Warsi for their patience and
sincerity in handling this project.

ii

TABLE OF CONTENTS

Acknowledgement
Table of Contents

..
..

.....
. . . . . ....

ii

. iii

CHAPTER
I.

II.

GAME THEORY:

AN OVERVIEW.

.....

METHODS FOR SOLVING SIMPLE GAMES

Payoff Matrix
Dominating Strategies
Minimax-Maximin
III.

SOLVING COMPLEX GAMES.

..

13

Mixed Strategies
Graphical Solution
IV.

LINEAR PROGRAMMING

......

21

Simplex Method Review

Linear Programming Solution for a Game

v.

NUMERICAL EXAMPLES

BIBLIOGRAPHY

.........
. . .

iii

28
37

CHAPTER I
GAME THEORY:

AN OVERVIEW

A game is a situation involving two or more persons

who are referred to as players:

The players are in

conflict with each other as to the other's objectives in

the game.

The result of each player's objectives may be a

win, which is a positive payoff, or a loss, a negative

payoff.
Games

~ay

be either strategic or games of chance.

Some strategic games include chess or checkers, while

tossing a coin or die may be thought of as a game of
chance.

Those games that are strategic in nature require

much skill and some knowledge of the opponent's possible

moves.

Games of chance require none or very little skill.

Everyday strategic games can be political or economical by

nature.
Game theory is a mathematical theory of the game as
it is described above.

In game theory there are

opponents, the players, whose objectives may be finite or

infinite.

The objectives are called strategies.

The wins

and losses of each one of the players are defined as

1

payoffs.

Most research in game theory has been done with

two opponents.
theory.

This type is defined as two-person game

The opponents may be two persons or even two

warring countries.

Labor-management disputes can be

settled using game theory.

Some research has been done

for an n-person game, that is, there are at least n>2

players.

An example of an n-person game is an inter-

national disarmament conference where the players are the

participating countries.

Games may be further described

as constant-sum or non-constant sum games.

In the first

case, rewards or payoffs to the players yield a fixed

constant regardless of the strategy chosen.
case, rewards carry various values.

In the latter

As stated before,

most research deals with a two-person zero-sum game.

That

is, there are two players and the winnings or payoffs to

one of the players is a loss for the other.
total of the payoffs is zero always.
be concerned with the

two~person

Thus, the

This research will

zero-sum game.

The theory of games was created to approach and solve

some economic problems.

Game theory is used for military,

business, finance, and marketing purposes.

The theory has

been used in pure mathematics, political science, and even

in psychology.

It can be applied to any type of parlor

game, that is, bridge, chess, checkers, and solitaire.

is a theory that is applied to games as probability is

It

applied to chance.

The basic concern of game theory is

with the feasibility of there being a best method to play

a game.

The number of ways or methods of playing the game

may be finite or infinite.

Methods of playing a game are

termed the strategies of the game.

A game usually ends

after a finite number of moves and thus produces a winner

and a loser.

Two-person games are characterized by

(1) two players, (2) each player's strategies, and (3) the
payoffs to each player.
Historically, mathematical models of a national
economy appeared around the 1870s.

This limited theory at

the time was proposed by Leon Walras and Vilfredo Pareto

in Recherches sur les Principes Mathematigues de la
Theorie Des Richesses.

However, the models used then were

broadened in the late 1920s and early 1930s by the great

mathematician John von Neumann.

The work that he

contributed was made available in later years.

In this

work there are a finite number of moves or strategies.

There are also payoffs or rewards to the players dependent
upon the moves made.

It should be noted that von Neumann

first published this theory at the age of 25.

The theory

of games was available to the public in the treatise

Theory of Games and Economic Behavior in 1944.

CHAPTER II
METHODS FOR SOLVING SIMPLE GAMES
Recall that a two-person game is characterized by
three things, the first being the two players, which has
been discussed somewhat earlier.

The second and third

characterizations will be studied in this chapter.

The

payoffs to players will be put in tabular form and the

strategies are the essentials to begin solving a game.
The payoff matrix will be discussed first, followed by
strategies used to solve simple games.
Payoff Matrix
The children's game stone-paper-scissors can be set
up as a model game.

The game consists of two players with

rules of the game as follows:

stone, paper, or scissors.

each player chooses one of

If both choose the same, then

the payoff to each is zero, that is, there is a tie.

As

for the items, paper will cover stone, stone breaks

scissors, and scissors cut paper.
+1 for a win and -1 for a loss.

Thus, a player receives

The game may be

represented in matrix form from the position of player

one.

The matrix is as follows:

4

-----

------

- - - - - - - - - - - - - - -

stone

paper

scissors

stone

-1

+1

paper

+1

-1

scissors

-1

-1

(2-1)

Matrix 2-1 is an example of a payoff matrix that is used

in game theory.

The headings, stone, paper, and scissors,

are the strategies available to each player.

The values

of the matrix are the payoffs in the form of winnings,

losses, or ties.
The two players in the game must make moves, actions,
and choices in order to compete with one another.

The

players are then said to be strategizing or using a

strategy in order to win the game.

Prior to each game,

the two players know the strategies available to one

another.

However, upon choosing a strategy, neither

player knows for certain which strategy his opponent will

choose.
The payoffs to player one in matrix 2-1 represent the
wins and losses for player one.

In general, the rewards

available to player one is in the form of an m x n matrix

(Aij)' where m rows and n columns represent the strategies
available to players one and two, respectively.

The total

number of possible outcomes is the product mn.

Thus, the

two-person zero-sum game is characterized by:

(1) the

strategies of each player, and (2) the payoff matrix

relative to player one.

The payoff matrix for the

second player is the negative of the payoff matrix for

player one.

This is so since any gain or win for player

one is a loss for player two.

The following 3 x 3 payoff matrix represents player
one's payoffs.
available.

Both players have three strategies

Since this matrix represents player one's

payoffs, he wins in most cases except where -1 in row

three represents a loss.

The zero in row two represents a

tie or no win or loss for either of the players.

The

numbers in the matrix may be used to represent units such

as dollars or customers.
1

-1

(2-2)

Because of the possible net gain of zero in strategy

three for player one, it is wise that strategy three not
be used.

It would be best that player one play strategy

two in hopes that player two will play strategy three.

This results in a net gain of eight for player one.
However, with the idea that player two is competent, he

will notice such a large gain for his opponent and play
the strategy that will minimize his loss.
It may be noticed that each player should develop
some rational criteria for choosing a strategy.

Thus,

each player must do the best to adopt the most rewarding

strategy.

That is, the players must choose an optimal

strategy.

However this is done, player one must do so in

order to maximize winnings.

At the same time, player two

must do all possible to minimize his losses.

Recall that

the payoff matrix represents the wins of player one.

Dominating

~trategies

In payoff matrix 2-2,. it may be that player one 1s

able to play one strategy only throughout the game to
insure a win.

That strategy is the best available

strategy of all those in the matrix.

If this is so, then

one strategy is said to dominate all of his other

strategies.

Because that is the only one played always,

it is said to_be a pure strategy.

In payoff matrix 2-2,

player one's strategy two (2, 4, 8) dominates the other

available strategies since the payoff values are greater
than or equal to the respective entries in the other
strategies.
As for player two, since his earnings must be
negative and his winnings small, he may play strategy two

(;~) only

since its entries are smaller than the other

payoffs.

Thus, player two's dominating strategy should

have payoff values less than or equal to other strategic

entries.

To use dominated strategies, each player should

rule out inferior strategies successively until there is

only one remaining choice.

Each player should eliminate

those strategies that are dominated.

In matrix 2-2, if player one eliminates strategy
three, then the matrix becomes:
1

Player two then eliminates strategy three to obtain:

1

Player one in return eliminates strategy one to obtain:

where player two should eliminate strategy two.

Player

one will receive a value of two from player one.

The

value of the game is said to be two.

The method of using

dominated strategies is very useful for reducing the size

of large-sized payoff matrices.

In some, the value of the

game can be found.

Minimax-Maximin
In reference to matrix 2-2, if player one were to
choose strategy two and player two chooses his strategy
one, then player one wins two and player two loses two.
The value of the game is said to be two.

However, suppose

player one were to choose strategy three, then neither

player wins or loses.
is said to be fair.

The value of the game is zero and

Because player one's strategy two

dominates the other ones, it would be best to choose

strategy three.

Player .two should have guessed that such

would happen, and thus chooses strategy two in order to

minimize loss.

This process could continue on and on with

each one trying to outguess the other.

In general, the primary purpose for each player is to
minimize maximum losses to his opponent.

This is called

the minimax criterion for choosing strategies.

That is,

player one will play that strategy that will give him the
largest payoff; however, he will do so at a minimum.
Player two, on the other hand, wishes to minimize losses,

10

so that he will choose that one strategy with the smallest

payoff to player one but at a maximum.

Therefore, player

one has the maximin strategy to play while his opponent

plays a minimax strategy.

The maximin and minimax will be

values from the payoff matrix.

The maximin is the lower

value of the game while the minimax is the upper value of

the game.
Each player is attempting to minimize losses, but
must do so while gaining a maximum reward.

Player one has

to determine the largest minimum reward so as not to lose

much to playe_r two.

At the same time, player two should

choose the maximum values in each of his strategies and

select the smallest of them in order to avoid large
losses.
As stated before, player one is choosing the maximin
of his strategies and player two will select his minimax
strategy.

This method allows for optimization of

strategies for each of the players.

illustrates the procedure.

The following example

Let matrix 2-3 be as follows:

(2-3)

11

Thus, the minimax and maximin have the same value.

A game that has a saddle point is said to be stable.

Both

players should play their respective strategy three.

minimum in row

[5]

[5]

minimax

maximum
in column

(2-4)

maximin

Thus, the minimax and maximin have the same value.

The value of the game is five, and since minimax=maximin,
then the value five is the saddle point of the game.

That

is to say that the saddle point is a minimum for player

one at the same time that it is a maximum for player one.
A game that has a saddle point is said to be stable.

Both

players in this instance will play strategy three only.

Strategy three is an optimal strategy for both players in
this game.

Neither player can improve his winnings

otherwise.

In general, minimax

maximin

value of the game and

value of the game.

Games that had saddle points are easy to solve and

tend to be boring in nature.

When a saddle point does not

exist in a game, then pure plays are not available to the

12

players.
needed.

Thus, other methods for solving games will be

CHAPTER III
SOLVING COMPLEX

GA~lES

The concept of mixed strategies is used with games

that do not have saddle points.

Consider the following

payoff matrix with no saddle point:

1
2

I
I
l
I
I
I

Thus, the maximin value < minimax value.

saddle point since equality does not hold.

(3-1) .

There is no
Observing the

matrix, it is noticed that player one has no dominating

strategy available to him.

However, if player one plays

strategy three and player two plays strategy three, then

player one wins two.

If player one were to instead choose

his first strategy, then player two will be wise to choose

strategy two.

He insures himself of no loss and player

one does not gain.

The players could continue in this

manner in order to improve their winnings.

13

14

Mixed Strategies
Matrix 3-1 has no saddle point.

When such occurs, it

is best that each player assign a probability distribution

to his set of strategies.

That is, let xi = probability

that player one will play strategy i where i = 1,

2, , m and player two has Yj =probability that player
two will play strategy j where j = 1, 2, , n.

Herem

and n represent the number of rows and columns of the

matrix, respectively.

Since the xi's and Yj's are

probability distributions, then xi, Yj

0 and

I:,x i =I:,Yj = 1.
In vector form the players have (x 1 , x 2 , , xm> and
(yl, Y2' , Yn>' referred to as the mixed strategies.
The given example will be used to illustrate players one
and two using mixed strategies.
in the example.

Matrix 3-1 will be used

Recall that it has no saddle point and

thus requires mixed strategies to be solved.

The

following mixed strategies may be chosen by players one

and two, respectively:

(0, ~' ~) and (~, ~' 0).

For

player one this means that he is opting to play strategies

two and three only, for he has opted to abandon strategy
one altogether since it has a playing probability of 0%.
As for player two, he has opted to play only strategies
one and two with equal time.
strategy.

He has abandoned the third

Each player is devoting SO% playing time to the

chosen strategies.

15

To determine the payoff reward to each player, it is

now termed the expected payoff and defined as follows for
each player:

a lJ
.. x.,
1
Here E1 denotes the expected payoff to player one having
the probability xi and payoff value aij E2 denotes the
expected payoff to player two with probability Yj and
payoff value aij
The maximin and minimax criterion are valid here.
Player one should adhere to maximizing the smallest payoff
value in a row.

In this case, he will choose the

maximin of the expected payoff values, that is,

max[min( ~ aimxi)], while the other player should
minimize the largest payoff value in the strategic
columns, i.e., min [max

('2:

anjYj) 1.

If the optimal solutions or probability values exist,

then the minimax expected payoff=maximin expected payoff.
The value of the game will then be v =

~ aijxiYj.

Here

xi and Yj are optimal probabilities for players one and

two, respectively.

The value aij is from the payoff

matrix.
Considering the mixed strategies for players one and
two, respectively, (0,

j,

~) and (~,~),the expected

value for player one shall be computed.

If player two

16

plays strategy one only, then player.one can expect a

value of

En.

n).=

1 2>~
1
(O, 2

4.

If player two chooses strategy two, then player one can

expect
E12

(0,

~' ~)

(!)

2.5.

For choosing strategy three, player one obtains

Notice that the first and the third expected values are
the same.

The minimum value is 2.5 and thus is the value

of the maximin expected value.

The same method can be used to compute the expected
values for player two .

However, this time using (~, ~, 0)

and the pure strategies of player one will yield a minimax

of 4.5.

It is also possible to improve one's earnings by

changing the values of the probability distribution.

It

may be that. player one will play strategy three 90% of the
time while strategy two is played 10% of the time.
action yields a minimax of 2.4.

This

-------------------------------

---

17

The graphical procedure for solving games will be

discussed next.

It will be noted that this procedure is

compact and very useful.

However, it will prove to be

limiting in the number of strategies available to at least

one of the players.

It is used with the concept of mixed

strategies.
Graphical Solution
In order to use the graphical procedure, one of the
players must have only two pure strategies available to
him.

Thus, the payoff matrix will be either a 2 x n or

m x 2 matrix.

If player one has only two pure strategies

to choose from, then x1 and x2 = l-x 1 will be th~ two

probability distributions that will serve as mixed
strategies.

Player two's mixed strategies would be the

vector (y1 , y 2 ) if he has only two strategies to choose

from. Recall that there is no saddle point in this game.
If player one has two strategies to choose from, then
in general the payoff matrix will appear as:

a12 an

(3-2)

a22 an
where the probabilities border the matrix.

The expected

value is the weighted average as in probability.

general, the expected value is given by:

In

18

The expected payoffs vary linearly with respect to x1

Here, x1 is the independent variable while Eln is the
dependent variable.

The above linear equations will be

graphed in the "Eln-xl" plane.

The highest point on the

lower intersecting lines defines the maximin for player

one and the optimum x 1 value. Similarly, if the expected
payoffs of player two were computed and graphed, then the
lowest point on the highest intersecting lines defines the
minimax for player two and the optimum y 1 value. The
following example exhibits the maximin expected value.
Consider the given payoff matrix and its expected
values:

-3

-6

{3-3)

19

E11
E14

= -x 1 + 2, E12 = -2x 1
= 13x 1 - 6,

+ 5, E13

= -7x 1

+ 4, and

The graph of the four lines yield:

Figure 1
In the graph, the lower portion of the graph where
lines 3 and 4 intersect give the x 1 needed. Equating the
two equations gives a value of ~ for x 1 This implies
that x 2 = ~ also, since the sum of the two is one. The
mixed strategy probability distribution is (~, ~), and the
expected payoff is also ~ upon substituting x 1 back into
equation 3 or 4. The probabilities obtained suggests that
player one should play strategies three and four for the
best payoffs.

20

It should be noted that the graphical procedure is

limiting.

It only allows for two strategies for one of

the players.

Although it is compact and interesting, one

must begin to realize that not all games involve only two
strategies.

The next chapter will use the simplex method

used in linear programming to solve games that have more

than two strategies available to both players.

CHAPTER IV
LINEAR PROGRAMMING
The graphical procedure is limiting as to the number
of strategies available to a player.

There are games in

which each player has three or more pure strategies.

The

graphical procedure cannot be used in these cases, and

thus the simplex method used to solve linear programming
problems is utilized.

Most games can be converted to

linear programming problems and thus solved.

Linear

programming and the simplex method are discussed, followed

by a game converted to a linear.programming problem.
Simplex Method Review
The theory of linear programming is concerned with
determining maximum and minimum values for linear
functions.

The function that is maximized or minimized is

the objective function.

The solution of a linear pro-

gramming problem is the vector x

for the given:

21

(x 1 , x2, x3 , , xn>

22
Maximize F
Subject to:

= c 1x1

+ c 2x2 + + cnxn

a 11 x1 +

a 12 ~2

+ + a 1 nxn

bl

a21x1 + a22x2 + + a2nxn ~ b2

where x1 , x2 , , xn ~ 0.
The inequalities are constraints and the xj's are
decision variables.

In the linear programming problem,

one is seeking a feasible solution or an optimal solution.

The optimal_ solution is the most favored one.

The simplex

method is the general procedure used to solve a linear

programming problem.

The following example illustrates a

linear programming problem solved by the simplex method.

= x1

Maximize:

Subject to:

x1 + 2x 2

3x 3 + x 2

+ x2

where x1 , x2 ~ 0.
Step one is to change the constraints to equations by
adding slack variables x 3 and x 4 to each to obtain:

23
F

= x1

+ x 2 + ox 3 + ox 4

(0}

=1

(1)

=2

(2}

x 1 + 2x 2 + x3
3x 1 + x 2 + x 4

for x1 , x2 , x3 , x 4 ~ 0. The coefficients of the above are

written in tabular form as follows:
Basic Variables

Equation

x2

x2

x3

x4

Solution

-1

-1

x3

x4

Steps 1 through 3 outline the simplex method as follows:

(1}

Choose the column with the largest negative

number.

In case of a tie, choose either.

Put a

box around the column and call it the pivot

column.
(2}

Using the boxed column, divide the solutions at

the right by each positive numQer in the boxed
column.

Put a box around the row with the

smallest ratio and call this row the pivot row.

The number in the box is the pivot number.
(3}

Construct a new tableau below the current one.

The first three columns remain the same except
that the variable in the pivot column replaces

24
the basic variable in the pivot row.

The new

rows are computed as follows:

New pivot row
New row

:Q;i.vot
=Old
Pivot number

~ow

row - (pivot
= old
(new pivot row)

column number) x

The example continues to give:

Basic Variables

Equation

xl

-1

x3

x4

....

x2 I x3
I
I
-1 I 0
I
2 I 1
I
1 . 0

,
3

..5..

xl

x2

xl

=-!- and x2 =+

=1

x3

-t
-t

Solution

Thus, x1

x4

_g_

15

-t %

+
+
+
+
-t
+

25

Linear Programming Solution for a Game

Games that require mixed strategies may be solved by
linear programming.

From player two's standpoint, the

optimum mixed strategy is found by the minimax criterion.

The following example is a maximization problem of a game.
In general, the standard form will look like.so:
Maximize:
Subject to:

a 11 Y1 + a 12 Y2 + + a 1 nYn

a21Y1 + a22Y2 + + a2nYn

Where Y1 , Y2 , Y3 , , Yn ~ 0 andY= 1/v and Yj = Yj/v.

Here v is the value of the game. Recall that in this case
one is looking for the vector (yl, Y2' Yn>
The following game will be solved by the simplex
method for player two.

The payoff matrix is as follows:

50

50

10

0.1
10

(4-1}

26
Thus, player one must:

= yl

Maximize:

Subject to:

SY1 +

+ y2 + y3
S~Y 2

+ SOY3

(0)

yl + y2 + O.lY 3 ~ 1
lOY1 + y2 + lOY3 ~ 1

(l)
(2)

The simplex tableau is as follows:

Basic Variable I Eq. No.
I
I

Yo
y4

Ys
y6

I
I
f
I
I
I
I
I

0
1
. 2

Yo

y4

Ys

y1

Yo

y2

Ys

y1

I Y0 I yl
I _I
I
I
-l
I 1
I
I 0 : 5
I
I
0 :

I
oI
I
oI
_I
I
1 I
I
oI
I
o I
I
I o I
I _I

y3

y4

Ys

y6

I
I

I
I
I
I
I

I Solution
I
I
0
I
I

-1

-1

so

so

"1:0

10

-9

_J._

_J._

10

45

10
1

_.9- -9

I
I
10
I 0
I _I
I
0
1 I
I
0 :

y2

-ro
99

I
I

-1

-1

J:O

-ro

10
1

1]""

J:O

TO

9
ll

J_

11

ss-

1*

.:1.

_J..._

99

-sg

99
-1

.JJL

_l_

55
_.2_

ua

"*

I~

-1

J:r
99

TO
9

99
_ft_

55

49

27

Thus, v

=+ =~ is the value of the game, and the vector

is thus ~ ~' 0).

strategy.

This is player one's best mixed

CHAPTER V
NUMERICAL EXAMPLES
The following three examples were solved by computer.
The first example is a simple linear programming problem.
Problems two and three are games.
solved by the simplex method.

All three problems were

The IBM Macintosh computer

with the MacSimplex package was used.

28

29

Solution:
I

Cl
Rl

-5.00

C2

-3.00

C3

-1.00

C4

-4.00

cs
-2.00

C6

r:7

C8

C9

ClO

R2

3.000

2.000

4.000

1.000

1.000

6.000

R3

1.000

3.000

1.000

2.000

3.000

1.000

8.000

R4

2.000

4.000

5.000

2.000

1.000

1.000

12.000

R5

1.000

3.000

2.000

4.000

1.000

1.000

8.000

cs

C6

r:7

C8

C9

ClO

-0.33

10.00

0.33

0.33

2.000

II

Cl

C2

C3

C4

Rl

0.33

5.666 -2.33

R2

1.000

0.67

1.333

R3

2.333 -0.33

1.666

2.666

1.000

6.000

R4

2.666

2.333

1.333

0.33

1.000

8.000

R5

2.333

0.67

3.666

0.67

1.000

6.000

C6

r:7

C8

C9

ClO

III

Rl

cs

Cl

C2

C3

1.818

6.090

0.09

.o

0.64

0.45

1.272

0.27

-0.09

1.454

-0.45

3.272

1.000 -0.36

5.818

C4

R2

1.000

R3

1.272 -0.64

2.363

1.000

R4

1.818

2.090

0.09

R5

0.64

0.18

1.000

0.18

The solution vector is (1.454,

o, o,

0.27

1.636, 0)

13.81

1.636

30

Example 2:
Find the optimum strategy for Y and the value of the
game.
y

-2

-1

-2

C5

C6

C7

cs

C9

1.00

1.000

1.000

(5-1)

Solution:
I
Cl
Rl

-1.00

C2

-1.00

C3

-1.00

R2

6.000

1.000

6.000

R3

4.000

4.000

5.000

R4

3.000 -1.00

3.000

C4

-1.00
1.000
-2.00
2.000

4.000
4.000

1.000
0

1.000

C5

C6

C7

C8

C9

0.25

0.25

-0.25

0.75

0.25

0.25

0.25

-2.00

1.000

1.000

II

Rl

Cl

C2

C3

0.25

4.750

R2

5.000

R3

1.ooo

R4

4.000

1.ooo
0

1.250
4.250

C4

-1.50
1.500
-o.5o

3.000
1.000

1.500 -1.00

1.000

1.000

1.250

31
III

Cl

C2

C3

Ri

s.ooo

s.ooo

R2

3.333

3.166

R3

2.666

R4

-1.00

1.000
0

2.833

-o.so

C4

cs

C6

c:7

C8

C9

3.000

1.000

1.000

2.000

0.67

-0.17

o.so

2.000

0.33

0.17

o.so

-1.00

o.so

1.000
0
0

-4.00

The sol uti on vector is (1,.., 0,

is

+,

1.000

o.so

0) and the game value

f.

Example 3:
In an experiment, two-year old girls and boys have
learned to recognize the ten digits.
proposed:

The following is

The girls' payoff values are represented by

columns, and the boys' are represented by rows.

The

children are shown cards labeled with one, two, three,

five, and eight dots.

If the two groups choose the same

card, then the boys receive from the girls a number of

points equal to twice the number of dots on the card.

If

the cards are different, then the girls receive a number

of points equal to the difference of the dots on the
cards.

Find:

(a) the payoff matrix, (b) the optimal

strategy for the boys, and (c) the value of the game.

32
Solution:
The payoff matrix is the 5x5 matrix.
1

-1

-2

-4

-7

-1

-1

-3

-6

-2

-1

-2

-5

-4

-2

10

-3

-7

-6

-5

-3

16

(5-2)

The value of the game may be zero or negative since the

.
matrix has a maximin of 4. A constant K=8 is ~dded to
the entries of the matrix to obtain the following matrix
with positive values.
1

10

12

14

18

24

(5-3)

The computations for the game are done in six iterations.

The six computer charts are given on the following three
pages.

C1

C2

C3

C4

C5

R1

-1.000

-1.000

-1.000

-1.000

-1.00

R2

10.000

7.000

6.000

4.000

R3

7.000

12.000

7.000

R4

6.000

7.000

R5

4.000

R6

1.000

C10

en

1.000

1.000

1.000

1.000

1.000

5.000

1.000

1.000

24.000

1.000

1.000

C6

C7

C8

C9

1.000

1.000

5.000

2.000

14.000

6.000

3.000

5.000

6.000

18.000

2.000

3.000

5.000

LU
LU

C1
R1

R2

C2

C3

C4

C5

II

C6

C7

C8

C9

C10

Cll

-0.30

-0.40

-0.60

-0.90

0.10

0.10

1.000

0.70

0.60

0.40

0.10

0.10

0.10

R3

7.10

2.80

2.20

1.30

-0.70

1.000

0.30

R4

2.80

10.40

3.60

2.40

-0.60

1.000

0.40

R5

2.20

3.60

16.40

4.60

-0.40

1.000

0.60

R6

'1.30

2.40

4.60

23.90

-0.10

1.000

0.90

~III

C1
R1

R2

C2

C3

C4

C5

C6

C7

c8

C9

C10

Cll

-0.2510

-0.3096

-0.4268

0.0962

0.0376

1.000

0.6946

0.5899

0.3808

0.10042

-0.0042

0.09623

R3

7.0292

2.6694

1.9497

-0.6945

1.000

-0.05434

0.25099

R4

2.6694

10.1590

3.138

-0.5899

1.000

-0.10032

0.3095

R5

1.9498

3.1382

15.5145

-0.38068

R6

0.0544

0.1004

0.1925

1.000

-0.0042

1.000 -0.19228
0

0.0418

0.1339

0.42658
0.0377

w
1:.

IV

C1

C2

C3

C4

C5

C11

C6

C7

C8

C9

C10
0.03231

0.1456

0.0005

0.08576

-0.1974

-0.2233

0.08574

0.02751

1.000

0.6467

0.5128

0.10975

-0.02455

R3

6.7841

2.2749

-0.6467

1.000

-0.1256

-0.03018

0.1974

R4

2.2749

9.5242

-0.5130

1.000

-0.2023

-0.0605

0.2232

R5

0.1257

0.2023

1.000

-0.0245

R6

0.03020

0.0611

0.0005

R1

R2

1.000

0.06446 -0.01239
-0.01241

0.0439

0.02749
0.03241

v
C6

C7

co

C9

C10

0.0737

0.0235

0.02276

0.03088

0.1508

0.1374

-0.0538

-0.01366

0.0038

0.07375

-0.5241

1~000

-0.2389

-0.0773

-0.01562

0.1441

0.2389

1.000

-0.0539

0.1050

0.0774

1.000

-0.0136

-0.0213

0.0688

-0.0137

0.02275

0.0156

1.000

0.0033

-0.0064

0.0137

0.002

0.03097

C1

C2

C3

C4

C5

R1

-0.14405

R2

1.000

0.5242

R3

6.2406

R4

R5
R6

-0.02124 -0.0064

Cll

. 0.02343

LU
U1

VI
C1

C2

C3

C4

C5

C6

C7

C8

R1

0.0616

0.02307

0.0179

R2

1.000

0.1814

-0.0839

R3

1.000

-0.0839

R4

1.000

R5

1.000

R6

1.000

C10

Cll

0.02097

0.03052

0.15087

-0.0337

-0.00717

0.00511

0.06165

0.1602

-0.0383

-0.01238

-0.0025

0.02308

-0.0338

-0.0382

0.1141

-0.0183

-0.0058

0. 01791

-0.0071

-0.0124

-0.0183

0.0698

-0.0135

0.02096

0.0046

-0.0025

-0.0058

0.0139

0.002

0.03061

C9

36
The value of the game matrix 5-3 is v =

o.r! 087

The game

value for the original game is v* = 0 15087 -8 = -1:372.

The solution vector x* = <x 1 *, x2 *, , x 5*> is 1.1!os1
(0.06165, 0.02308, 0.01791, 0.02096, 0.03061), which gives
X*= (0.40863, 0.15298, 0.11871, 0.1389, 0.20289).

This

yields that the boys will ensure a loss most of the time.
They should play strategy one at least 40% of the time
while playing strategy three only 11% of the time.
Game theory deals with competitive situations between
two or more persons.

Most research concentrates on the

two-person zero-sum game.

However, there are n-person

games and even infinite games.

Most of the research for

such theory is limited.

Two-person zero-sum games consist of very arbitrary
theory.

It requires complete knowledge of the payoff

matrix and, in some cases, much skill . Game theory has

its limitations in such a fast-growing world.

Research is

continuing to adapt the theory to complex situations.

BIBLIOGRAPHY
Chiang, Alpha c. Fundamental Methods of Mathematical
Economics. 2nd ed. New York: McGraw-Hill Book
Company, 1974.
Grossman, Stanley I. Applications for Elementary Linear
Algebra. California: Wadsworth Publishing Company,
1980.
Hillier, Frederick s. and Gerald J. Lieberman.
Introduction to Operations Research. 3rd ed.
California: Holden-Day, Inc, 1980.
Klekamp, Robert c. and Robert J. Thierauf. Decision Making
Theory Through Operations Research. 2nd ed. New York:
John Wiley and Sons, 1975.
Owen, Guillermo. Finite Mathematics. Philadelphia: W.B.
Saunders Company, 1970.
Steen, Lynn Arthur, ed. Mathematics Today. New York:
Vintage Books, 1978.
Taha, Hamdy A. Operations Research: An Introduction. 2nd
ed. New York: Macmillan Publishing Co., Inc., 1976.

37