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7-1-1988

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 • • • ..• • • • • • • .....• • • ii

Table of Contents • • ..• • • • • . . . . . .... . iii

CHAPTER
I. GAME THEORY: AN OVERVIEW. .....• • • • • 1

II. METHODS FOR SOLVING SIMPLE GAMES • • • • • • • 4

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 .........• • • • • 28

BIBLIOGRAPHY • • • • • • • • • • • • • • . . . • • • • • 37

iii
 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
 2

payoffs. Most research in game theory has been done with

two opponents. This type is defined as two-person game
theory. 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. In the latte·r
case, rewards carry various values. 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. Thus, the
total of the payoffs is zero always. This research will
be concerned with the two~person 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. It
is a theory that is applied to games as probability is
 3
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: each player chooses one of
stone, paper, or scissors. 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. Thus, a player receives
+1 for a win and -1 for a loss. The game may be
represented in matrix form from the position of player
one. The matrix is as follows:
4
----- ------ - - - - - - - - - - - - - - -

5
stone paper scissors

stone 0 -1 +1
paper +1 0 -1 (2-1)
scissors -1 -1 0

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
 6
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. Both players have three strategies
available. 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 2 3

1 1 3 5

2 2 4 8 (2-2)
3 -1 0 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
 7
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
 8

(;~) 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 2 3

1 1 3 5

2 2 4 8

Player two then eliminates strategy three to obtain:

1 2

1 1 3

2 2 4

Player one in return eliminates strategy one to obtain:

1 2

2 2 4
 9
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. The value of the game is zero and
is said to be fair. 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. The following example
illustrates the procedure. Let matrix 2-3 be as follows:

l 2 3

l l 4 2
2 8 9 2 (2-3)
3 8 9 5
 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.

1 2 3 minimum in row

1 1 4 3 1

2 8 9 2 2 (2-4)
3 7 6 5 [5] maximin
maximum
in column 8 9 [5] minimax

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 ~ value of the game and
maximin ~ 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. Thus, other methods for solving games will be
needed.
 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:

l 2 3

I
1 I 6 0 7 0
l
2 I 3 1 6 1 (3-1) .
I
3 I 5 4 2 2

6 4 7

Thus, the maximin value < minimax value. There is no

saddle point since equality does not hold. 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. Matrix 3-1 will be used
in the example. 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. He has abandoned the third
strategy. 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 = 2 ~ 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. 1 2>~
(O, 2• 1 n).= 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. This
action yields a minimax of 2.4.
------------------------------- - ---

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. In
general, the expected value is given by:
 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:

1 3 -3 7 {3-3)

2 5 4 -6
 19

E11 = -x 1 + 2, E12 = -2x 1 + 5, E13 = -7x 1 + 4, and

E14 = 13x 1 - 6,
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 = (x 1 , x2, x3 , ••• , xn>
for the given:

21
 22

Maximize F = c 1x1 + c 2x2 + ••• + cnxn

Subject to: 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.

Maximize: F = x1 + x2
Subject to: x1 + 2x 2 ~ 1
3x 3 + x 2 ~ 2

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}
x 1 + 2x 2 + x3 =1 (1)
3x 1 + x 2 + x 4 =2 (2}

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

F 0 -1 -1 0 0 0

x3 1 1 2 1 0 1
x4 2 3 1 0 1 1

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 =Old :Q;i.vot

Pivot number
~ow

New row = old row - (pivot

(new pivot row)
column number) x

The example continues to give:

Basic Variables Equation F xl x2 I x3 x4 Solution

I
I
F 0 1 -1 -1 I 0 0 0
I
x3 l 0 1 2 I 1 0 1
I
x4 2 0 3 1 ·. 0 1 2
,
.... n 1 0 =1 0 3 +
x3 1 0 0 ..5..
3 1
+ +
xl 2 0 1
+ 0
+ +
F 0 1 0 0 -t _g_
15 +
x2 1 0 0 1 -t + -t
xl 2 0 1 0 -t % +
Thus, x1 =-!- and x2 =+·
 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 ~ 1
a21Y1 + a22Y2 + ••• + a2nYn ~ 1

•
•
•

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:

1 2 3

1 5 50 50
2 1 1 0.1 (4-1}
3 10 1 10
 26

Thus, player one must:

Maximize: y = yl + y2 + y3
Subject to: SY1 + S~Y 2 + SOY3 ~ 1 (0)
yl + y2 + O.lY 3 ~ 1 (l)
lOY1 + y2 + lOY3 ~ 1 (2)

The simplex tableau is as follows:

Basic Variable I Eq. No. I Y0 I yl y2 y3 y4 Ys y6 I Solution

I
I I _I I
I I
I I I I I
Yo I 0 I 1 -l -1 -1 I 0 0 0 I 0
f I I I
y4 I 1 I 0 : 5 so so I l 0 0 1
I I I 1
I
Ys I . 2 0 : i 1 "1:0 0 l 0 1
I I I
y6 I 3 I 0 10 1 10 0 0 1 1
I _I
I -9 _J._ _J._
Yo 0 1 I 0 -ro 0 I
I 0 0 10 10
I 99 -1 1
y4 1 0 : 0 2 45 1 0 T 2
I _.9- -9 -1 9
Ys 2 oI 0 10 J:O 0 1 -ro TO
I 1 9
3 oI 1 1 0 0 -1
y1 1]"" J:O TO
_I
I 9 _l_ J_ 6
Yo 0 1 I 0 0 ll 55 0 11 ss-
I _.2_ _J..._
y2 1 oI 0 1* 99 0 .:1.
99 99

Ys 2
I
o I
I
0 o ua -sg 1 -1
J:r
_ft_
55

I~ .JJL 49
I o I

"*
y1 3 1 0 0 99 ~
I _I I
 27
Thus, v =+ =~ is the value of the game, and the vector
is thus ~ ~' 0). This is player one's best mixed
strategy.
 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. All three problems were
solved by the simplex method. The IBM Macintosh computer
with the MacSimplex package was used.

28
 29
Solution:
I

Cl C2 C3 C4 cs C6 r:7 C8 C9 ClO

Rl -5.00 -3.00 -1.00 -4.00 -2.00 0 0 0 0 0

R2 3.000 2.000 4.000 1.000 1.000 0 0 0 0 6.000

R3 1.000 3.000 1.000 2.000 3.000 0 1.000 0 0 8.000

R4 2.000 4.000 5.000 2.000 1.000 0 0 1.000 0 12.000

R5 1.000 3.000 2.000 4.000 1.000 0 0 0 1.000 8.000

II

Cl C2 C3 C4 cs C6 r:7 C8 C9 ClO

Rl 0 0.33 5.666 -2.33 -0.33 0 0 0 0 10.00

R2 1.000 0.67 1.333 0.33 0.33 0 0 0 0 2.000

R3 0 2.333 -0.33 1.666 2.666 0 1.000 0 0 6.000

R4 0 2.666 2.333 1.333 0.33 0 0 1.000 0 8.000

R5 0 2.333 0.67 3.666 0.67 0 0 0 1.000 6.000

III

Cl C2 C3 C4 cs C6 r:7 C8 C9 ClO

Rl 0 1.818 6.090 0 0.09 0 0 .o 0.64 13.81

R2 1.000 0.45 1.272 0 0.27 0 0 0 -0.09 1.454

R3 0 1.272 -0.64 0 2.363 0 1.000 0 -0.45 3.272

R4 0 1.818 2.090 0 0.09 0 0 1.000 -0.36 5.818

R5 0 0.64 0.18 1.000 0.18 0 0 0 0.27 1.636

The solution vector is (1.454, o, o, 1.636, 0) •

 30

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

6 1 6 1 4

X 4 4 5 -2 4 (5-1)

3 -1 3 2 -2

Solution:
I

Cl C2 C3 C4 C5 C6 C7 cs C9

Rl -1.00 -1.00 -1.00 -1.00 1.00 0 0 0 0

R2 6.000 1.000 6.000 1.000 4.000 1.000 0 0 1.000

R3 4.000 4.000 5.000 -2.00 4.000 0 1.000 0 1.000

R4 3.000 -1.00 3.000 2.000 -2.00 0 0 1.000 1.000

II

Cl C2 C3 C4 C5 C6 C7 C8 C9

Rl 0 0 0.25 -1.50 0 0 0.25 0 0.25

R2 5.000 0 4.750 1.500 3.000 1.000 -0.25 0 0.75

R3 1.ooo 1.ooo 1.250 -o.5o 1.000 0 0.25 0 0.25

R4 4.000 0 4.250 1.500 -1.00 0 0.25 1.000 1.250

 31
III

Cl C2 C3 C4 cs C6 c:7 C8 C9

Ri s.ooo 0 s.ooo 0 3.000 1.000 0 0 1.000

R2 3.333 0 3.166 1.000 2.000 0.67 -0.17 0 o.so

R3 2.666 1.000 2.833 0 2.000 0.33 0.17 0 o.so
R4 -1.00 0 -o.so 0 -4.00 -1.00 o.so 1.000 o.so

The sol uti on vector is (1,.., 0, +, 0) and the game value

is f.
Example 3:
In an experiment, two-year old girls and boys have
learned to recognize the ten digits. The following is·
proposed: 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 2 3 5 8

1 2 -1 -2 -4 -7

2 -1 4 -1 -3 -6
3 -2 -1 6 -2 -5 (5-2)
5 -4 3 -2 10 -3
8 -7 -6 -5 -3 16

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 2 3 5 8

1 10 7 6 4 1
2 7 12 7 5 2
3 6 7 14 6 3 (5-3)
5 4 5 6 18 5
8 1 2 3 5 24

The computations for the game are done in six iterations.

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

C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 en
R1 -1.000 -1.000 -1.000 -1.000 -1.00 0 0 0 0 0 0

R2 10.000 7.000 6.000 4.000 1.000 1.000 0 0 0 0 1.000

R3 7.000 12.000 7.000 5.000 2.000 0 1.000 0 0 0 1.000

R4 6.000 7.000 14.000 6.000 3.000 0 0 1.000 0 0 1.000

R5 4.000 5.000 6.000 18.000 5.000 0 0 0 1.000 0 1.000

R6 1.000 2.000 3.000 5.000 24.000 0 0 0 0 1.000 1.000

LU
LU
II

C1 C2 C3 C4 C5
. C6 C7 C8 C9 C10 Cll

R1 0 -0.30 -0.40 -0.60 -0.90 0.10 0 0 0 0 0.10

R2 1.000 0.70 0.60 0.40 0.10 0.10 0 0 0 0 0.10

R3 0 7.10 2.80 2.20 1.30 -0.70 1.000 0 0 0 0.30

R4 0 2.80 10.40 3.60 2.40 -0.60 0 1.000 0 0 0.40

R5 0 2.20 3.60 16.40 4.60 -0.40 0 0 1.000 0 0.60

R6 0 '1.30 2.40 4.60 23.90 -0.10 0 0 0 1.000 0.90

~-

III

C1 C2 C3 C4 C5 C6 C7 c8 C9 C10 Cll

R1 0 -0.2510 -0.3096 -0.4268 0 0.0962 0 0 0 0.0376 0.1339

R2 1.000 0.6946 0.5899 0.3808 0 0.10042 0 0 0 -0.0042 0.09623

R3 0 7.0292 2.6694 1.9497 0 . -0.6945 1.000 0 0 -0.05434 0.25099

R4 0 2.6694 10.1590 3.138 0 -0.5899 0 1.000 0 -0.10032 0.3095

R5 0 1.9498 3.1382 15.5145 0 -0.38068 0 0 1.000 -0.19228 0.42658

R6 0 0.0544 0.1004 0.1925 1.000 -0.0042 0 0 0 0.0418 0.0377

w
1:.
IV

C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11

R1 0 -0.1974 -0.2233 0 0 0.08574 0 0 0.02751 0.03231 0.1456

R2 1.000 0.6467 0.5128 0 0 0.10975 0 0 -0.02455 0.0005 0.08576

R3 0 6.7841 2.2749 0 0 -0.6467 1.000 0 -0.1256 -0.03018 0.1974

R4 0 2.2749 9.5242 0 0 -0.5130 0 1.000 -0.2023 -0.0605 0.2232

R5 0 0.1257 0.2023 1.000 0 -0.0245 0 0 0.06446 -0.01239 0.02749

R6 0 0.03020 0.0611 0 1.000 0.0005 0 0 -0.01241 0.0439 0.03241

 v
C1 C2 C3 C4 C5 C6 C7 co C9 C10 Cll

R1 0 -0.14405 0 0 0 0.0737 0 0.0235 0.02276 0.03088 0.1508

R2 1.000 0.5242 0 0 0 0.1374 0 -0.0538 -0.01366 0.0038 0.07375

R3 0 6.2406 0 0 0 -0.5241 1~000 -0.2389 -0.0773 -0.01562 0.1441

R4 0 0.2389 1.000 0 0 -0.0539 0 0.1050 -0.02124 -0.0064 . 0.02343

R5 0 0.0774 0 1.000 0 -0.0136 0 -0.0213 0.0688 -0.0137 0.02275

R6 0 0.0156 0 0 1.000 0.0033 0 -0.0064 0.0137 0.002 0.03097

LU
U1

VI

C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 Cll

R1 0 0 0 0 0 0.0616 0.02307 0.0179 0.02097 0.03052 0.15087

R2 1.000 0 0 0 0 0.1814 -0.0839 -0.0337 -0.00717 0.00511 0.06165

R3 0 1.000 0 0 0 -0.0839 0.1602 -0.0383 -0.01238 -0.0025 0.02308

R4 0 0 1.000 0 0 -0.0338 -0.0382 0.1141 -0.0183 -0.0058 0. 01791

R5 0 0 0 1.000 0 -0.0071 -0.0124 -0.0183 0.0698 -0.0135 0.02096

R6 0 0 0 0 1.000 0.0046 -0.0025 -0.0058 0.0139 0.002 0.03061

L
 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