For a non-political expert, Bruce Bueno de Mesquita of the University of New York makes surprisingly accurate predictions of political events. He managed to predict the resignation of Hosni Mubarak and Pereverz Musharaf from their posts with an accuracy of several months. He accurately named the receiver of Ayatollah Khomeini as the leader of Iran 5 years before his death. To the question of what is the secret, he replies that he does not know the answer - the game knows him. By game here is meant a mathematical method that was originally created to formulate and analyze the strategies of various games, namely, game theory. In economics, it is used most often. Although it was originally designed to build and analyze strategies in games used for entertainment.
Game theory is a numerical apparatus that allows you to calculate the scenario, or, more precisely, the likelihood of various scenarios of the behavior of a system or "game" controlled by various factors. These factors, in turn, are determined by a certain number of “players”.
Game theory and economic behavior are very strongly and organically intertwined. This is natural. This determines the range of problems that game theory solves in economics. It helps to calculate the sequence of events based on the fact that participants will pursue their interests. The goals, motivation and degree of influence of various players are input parameters of practical problems that game theory solves.
In the economy, players are manufacturing enterprises, trading companies, banks and other organizations of all kinds. Based on these parameters, the computer model estimates the probability of different scenarios for each player’s behavior, calculates their ability to influence the decisions of other players, and thus calculates the most expected sequence of events.
Game theory in economics is a great forecasting tool. This method is particularly effective in the field of auction modeling. Bids at the auction are quantitatively described, and the final result can often be accurately predicted. Consulting agencies effectively use computer programs based on game theory to make auction transactions with the maximum benefit for the client. For example, the tactics developed by Professor Milgrom for Time Warner and Comcast to bid for broadcast frequencies were triumphant and saved these firms almost $ 1.2 million.
Game theory, in economics that allows the efficient use of finances, in politics can resolve protracted conflicts and negotiations that have reached an impasse. The idea of using a computer as an independent negotiator in a situation where the process has reached an impasse has long been put forward. Such programs, as an independent agent, can move the process off the ground, without upsetting the balance of interests of different parties. Similar programs are now actively developed and tested in the field of divorce proceedings.
Thus, the game theory, which received the main impetus for development in economics, can be applied in various fields of human activity. It is too early to say that these programs should be used to resolve military conflicts, but in the future this is quite realistic.
