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Algebraic Method: Game Theory

In this section, we will talk about the algebraic method used to solve mixed strategy games. Here we have provided formulas and examples of algebraic method.

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Formulas Example 1 Example 2

Consider the zero sum two person game given below:

Player B I II Player A I a II c

b d

Formulas: Algebraic Method

The solution of the game is: A plays (p, 1 - p) where: p = d-c -------------------(a + d) - (b + c)

B plays (q, 1 - q) where: q = d-b ------------------(a + d) - (b + c) ad - bc -------------------(a + d) - (b + c)

Value of the game, V =

Algebraic Method Example 1: Game Theory

Algebraic Method Example 1: Game Theory

Consider the game of matching coins. Two players, A & B, put down a coin. If coins match (i.e., both are heads or both are tails) A gets rewarded, otherwise B. However, matching on heads gives a double premium. Obtain the best strategies for both players and the value of the game.
Player B I II Player A

2 II -1
I

-1 1

Solution. This game has no saddle point. p = 1 p = 3/5 q = 1 q = 3/5 V = 2 X 1 - (-1) X (-1) -------------------------(2 + 1) - (-1 - 1) = 1 ---5 1 - (-1) ----------------------(2 + 1) - (-1 - 1) = 2 ---5 1 - (-1) ----------------------(2 + 1) - (-1 - 1) = 2 ---5

Example 2: Algebraic Method in Game Theory Solve the game whose payoff matrix is given below:
Player B I II I II

Player A

1 6

7 2

Solution. This game has no saddle point. p = 1 p = 3/5 q = 2-7 ----------------------(1 + 2) - (7 + 6) = 1 ---2 2-6 ----------------------(1 + 2) - (7 + 6) = 2 ---5

1 q = 1/2 1 X 2 - (7 X 6)

V =

1 X 2 - (7 X 6) -------------------------(1 + 2) - (7 + 6)

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