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B Dayal
Prof B Dayal
COMPETITIVE SITUATION
COPETITIVE SITUATION OCCUR WHEN TWO OR MORE
PARTIES WITH CONFLICTING INTERESTS OPERATE.
MARKETING DIFFERENT BRANDS OF A COMMODITY.
TWO OR MORE BRANDS OF AN ITEMS TRYING TO
CAPTURE THE MARKET BY ADOPTING VARIOUS
METHODS.
CAMPAIGNING FOR ELECTION. TWO OR MORE
CANDIDATES WHO CONTEST AN ELECTION TRY TO
CAPTURE MORE VOTES BY ADOPTING VARIOUS
METHODS.
FIGHTING MILITARY BATTLES. TWO FORCES FIGHTING
A WAR TRY TO GAIN SUPREMACY OVER ONE ANOTHER
BY ADOPTING VARIOUS COURSES OF ACTION.
WE CONSIDER EACH OF THE ABOVE SITUATIONS TO BE A
COMPETITIVE GAME WHERE THE PARTIES (PLAYERS)
ADOPT A COURSE OF ACTION (PLAY THE GAME).
COMPETITIVE GAME
CHARECTERISTICS OF A COPETITIVE GAME.
THE NUMBER OF PLAYERS (COPETITORS) IS FINITE.
EACH PLAYER HAS FINITE NUMBER OF COURSES OF
ACTION (MOVES).
THE GAME IS SAID TO BE PLAYED WHEN EACH PLAYER
ADOPTS ONE OF HIS COURSE OF ACTION.
EACH TIME THE GAME IS PLAYED, THE
CORRESPONDING COMBINATION OF COURSES OF
ACTION LEADS TO A TRANSACTION (PAYMENT) TO
EACH PLAYER. THE PAYMENT IS CALLED PAY-OFF
(GAIN). THE PAY-OFF MAY BE MONETARY (MONEY) OR
SOME SUCH BENEFIT AS INCREASED SALES ETC.
THE PLAYERS DO NOT COMMUNICATE TO EACH OTHER.
THE PLAYRS KNOW THE RULES OF THE GAME BEFORE
STARTING.
COMPETITIVE GAME
CHARECTERISTICS OF A COPETITIVE GAME.
N-PERSON GAME.
A GAME IN WHICH n PLAYERS PARTICIPATE IS CALLED
n-PERSON GAME.
A GAME IN WHICH TWO PERSONS PARTICIPATE, IS
CALLED TWO-PERSON GAME.
ZERO-SUM GAME.
IF A GAME IS SUCH THAT WHENEVER IT IS PLAYED THE
SUM OF THE GAINS (PAY-OFF) OF THE PLAYERS IS
ZERO, IT IS CALLED ZERO-SUM GAME.
A ZERO-SUM GAME WHICH HAS TWO PLAYERS IS
CALLED TWO-PERSON ZERO-SUM GAME. IT IS CALLED
“RECTANGULAR GAME”.
IN A TWO-PERSON ZERO-SUM GAME, THE GAIN OF THE
ONE PLAYER IS EQUAL TO THE LOSS O THE OTHER.
TWO-PERSON ZERO-SUM GAME
(RECTANGULAR GAME)
A TWO-PERSON ZERO-SUM GAME IS ONE IN WHICH:
TWO PLAYERS PARTICIPATE.
THE GAIN OF ONE PLAYER IS THE LOSS OF OTHER.
PLAYERS – ‘A’ AND ‘B’
COURSES OF ACTION:
PLAYER ‘A’ – A1, A2, A3, ------- AM
PLAYER ‘B’ – B1, B2, B3, ------- BN
PAY-OFF OF PLAYER ‘A’ – aiJ (i = 1,2----M;
J= 1,2,-----N)
STRATEGY. STRATEGY OF A PLAYER IS THE PRE-DETERMINED
RULE BY WHICH HE CHOOSES HIS COURSE OF ACTION WHILE
PLAYING THE GAME.
PURE STRATEGY. WHILE PLAYING A GAME, PURE STRATEGY OF A
PLAYER IS HIS PRE-DECISION TO ADOPT A SPECIFIED COURSE OF
ACTION, IRRESPECTIVE OF THE STRATEGY OF THE OPPONENT.
MIXED STRATEGY. WHILE PLAYING A GAME, MIXED STRATEGY IS HIS
PRE-DECISION TO ADOPT HIS COURSE OF ACTION ACCORDING TO
CERTAIN PRE-ASSIGNED PROBABILITIES.
THUS, IF PLAYER A DECIDES TO ADOPT COURSES OF ACTION A1AND
A2 WITH PERSPECTIVE PROBABILITIES 0.4 AND 0.6, IT IS MIXED
STRATEGY.
TWO-PERSON ZERO-SUM GAME
(RECTANGULAR GAME)
PAY OFF MATRIX OF PLAYER A
PLAYER B
B1 B2-------------Bn
A1
a11 a12---------------a1n
a21 a22--------------a2n
PLAYER A A2
- - -
-
-
- - -
am1 am2---------------amn
Am
EXAMPLE 1
(2-FINGER MORRA GAME)
TWO PERSONS A AND B PLAY A GAME.
THEY SHOULD SIMULTENEOUSLY RAISE
THEIR HAND AND EXHIBIT EITHER ONE
FINGER OR TWO FINGERS. IF BOTH OF
THEM SHOW ONE FINGER OR BOTH SHOW
TWO FINGERS, A SHOULD PAY RS 10 TO B.
ON THE OTHER HAND, IF ONE PLAYER
SHOWS ONE FINGER AND THE OTHER
PLAYER SHOWS TWO FINGERS, B
SHOULD PAY RS 5 TO A.
MAKE THE PAY-OFF MATRIX
IDENTIFY THE STRATEGIES OF PLAYER A.
EXAMPLE 1
PLAYER A A1 -10 5
(ONE FINGER)
A2 5 -10
(TWO FINGERS)
MAXIMIN – MINIMAX PRINCIPLE
MAXIMIN. MAXIMUM OF THE ROW MINIMUM IN THE PAY-
OFF MATRIX IS CALLED MAXIMIN.
THUS, α = MAXi { MINJ (aiJ)}
THIS IS IS THE MAXIMUM GAIN FOR PLAYER ‘A’ OUT OF
THE MINIMUM GAINS OF THE ROWS (αi )
MINIMAX. THE MINIMUM OF THE COLUMN MAXIMUMS IN
THE PAY-OFF MATRIX IS CALLED MINIMAX.
THUS, β = MINJ {MAXi (aiJ)}
SADDLE POINT. SADDLE POINT IS THE POSITION WHERE
THE MAXIMIN AND MINIMAX COINCIDE.
α=β=V
IF THE MAXIMIN OCCURS IN THE Rth ROW AND IF MINIMAX
OCCURS IN Sth COLUMN, THE POSITION (R, S) IS THE
SADDLE POINT. HERE, V = aRS IS THE VALUE OF THE
GAME.
MAXIMIN – MINIMAX PRINCIPLE
A1 6 12 7
PLAYER A
A2 7 9 8
3 0
0 -2
-7 -4
B1 B2 B3 B4
A1 20 15 12 35
A2 25 14 8 10
A3 -5 4 11 0
SOLVED PROBLEM 7
SOLVE THE FOLLOWING ZERO-SUM GAME
AND FIND ITS VALUE.
COMPANY Y
B1 B2 B3 B4
A 6 -2 4 1
B 6 1 12 3
COMPANY X
C -3 -2 -2 6
D 2 -3 7 7
SOLVED PROBLEM 8
PLAYER A A1 4 7 0
A2 -1 3 6
PLAYER A A1 5 7
A2 4 0