160
X-Machines for Agent-Based Modeling: FLAME Perspectives
“Game theory has developed powerful tools for analyzing decision
making in systems with multiple autonomous actors. These tools, when
tailored to computational settings, provide a foundation for building
multi-agent software systems. This tailoring gives rise to the field of
computational mechanism design, which applies economic principles to
computer systems designs.” [46]
Games have been used with economics to explain how individual players
adopt different strategies when trying to constantly outsmart each other [157].
Game theory embodies research as different kinds of games and is essentially
the study of these strategies. Most games have payoff matrices that determine
the profit received by the agent when a certain strategy is played. Economists
widely used game theoretic approaches to model goal-directed behavior in
agents as a way to emulate competitive and collaborative characteristics in
humans.
The utility functions are embeded within players and allow them to assess
their behavior. Each player is a self-interested individual, trying to improve
their behavior by measuring it, using the utility function. However, this approach is still very limiting assuming all agents behave in predefined ways,
ignoring the varied personalities of humans and other events affecting their
decisions.
Since traditional economic ideologies are based on rational theory, game
theory provides a number of advantages for scientists to view economic and social systems as game scenarios. These systems contain the following attributes:
• Introduce a rational choice theory for all players.
• The provision of the utility function which is maximized by all players.
• Investigate the concepts of domination using the Nash equilibrium.
6.5.1 Nash Equilibrium
Equilibrium in economics is another important concept, first projected
in Walrasian models, where Walras was convinced that economics could be
made predictable. He was influenced by the physics principles and imported
the concept of equilibrium, laying mathematical foundations in traditional
economics [21]. The theory supports the claim of the invisible hand, stating
that whatever happens in the market, it would eventually reach an equilibrium
which is the best scenario for all players or actors in the system.
In game theory, Nash equilibrium was proposed by John Forbes Nash
[139, 138] in games that involve two or more players. Each player assumes to
play the strategy that lies close to the equilibrium, which is the point when
no player would benefit if it strayed from the current equilibrium strategies,
being the best for all players.
X-Machines for Agent-Based Modeling: FLAME Perspectives
“Game theory has developed powerful tools for analyzing decision
making in systems with multiple autonomous actors. These tools, when
tailored to computational settings, provide a foundation for building
multi-agent software systems. This tailoring gives rise to the field of
computational mechanism design, which applies economic principles to
computer systems designs.” [46]
Games have been used with economics to explain how individual players
adopt different strategies when trying to constantly outsmart each other [157].
Game theory embodies research as different kinds of games and is essentially
the study of these strategies. Most games have payoff matrices that determine
the profit received by the agent when a certain strategy is played. Economists
widely used game theoretic approaches to model goal-directed behavior in
agents as a way to emulate competitive and collaborative characteristics in
humans.
The utility functions are embeded within players and allow them to assess
their behavior. Each player is a self-interested individual, trying to improve
their behavior by measuring it, using the utility function. However, this approach is still very limiting assuming all agents behave in predefined ways,
ignoring the varied personalities of humans and other events affecting their
decisions.
Since traditional economic ideologies are based on rational theory, game
theory provides a number of advantages for scientists to view economic and social systems as game scenarios. These systems contain the following attributes:
• Introduce a rational choice theory for all players.
• The provision of the utility function which is maximized by all players.
• Investigate the concepts of domination using the Nash equilibrium.
6.5.1 Nash Equilibrium
Equilibrium in economics is another important concept, first projected
in Walrasian models, where Walras was convinced that economics could be
made predictable. He was influenced by the physics principles and imported
the concept of equilibrium, laying mathematical foundations in traditional
economics [21]. The theory supports the claim of the invisible hand, stating
that whatever happens in the market, it would eventually reach an equilibrium
which is the best scenario for all players or actors in the system.
In game theory, Nash equilibrium was proposed by John Forbes Nash
[139, 138] in games that involve two or more players. Each player assumes to
play the strategy that lies close to the equilibrium, which is the point when
no player would benefit if it strayed from the current equilibrium strategies,
being the best for all players.