GAME THEORY

A Seminar Report
Submitted in Partial Fulfillment of the Requirements for the
Degree of

Bachelor of Technology
in

Electronics And Communication Engineering

By
SIDDHARTH JAIN (12BEC096)
SUYASH GANDHI (12BEC100)
Under the Guidance of
PROF. KHYATI VACHHANI

Department of Electrical Engineering

INSTITUTE OF TECHNOLOGY
NIRMA UNIVERSITY

Ahmedabad 382 481

November 2013

INSTITUTE OF TECHNOLOGY
NIRMA UNIVERSITY
DEPARTMENT OF ELECTRICAL ENGINEERING
AHMEDABAD 382481
CERTIFICATE

This is to certify that the seminar report entitled Game

Theory submitted by SIDDHARTH JAIN (12BEC096) And SUYASH
GANDHI (12BEC100) towards the partial fulfillment of the
requirements for the award of the degree in Bachelor of
Technology (Electronics And Communication Engineering) of
Nirma University is the record of work carried out by him/her
under my/our supervision and guidance. The work submitted
has in our opinion reached a level required for being
accepted for examination.

DATE: ____________________________________

______________________
____________________________
Name of Guide

Signature of Guide

Table Of Contents
Acknowledgement
Abstract
Introduction
History
Conclusion
References

ACKNOWLEDGEMENT
We are thankful to the Electronics department of the Institute of
Technology, Nirma University for giving us this opportunity to
prepare a seminar on Virtual Reality.
We would like to express our gratitude towards Prof Dr. P.N.
Tekwani, HOD, Electronics & Communications department for his
permission to explore the world of this field.
We are deeply indebted to Prof. Khyati Vachhani, our Project guide,
for her guidance and encouragement that made us understand
the real part of this project in depth.
We would like to thank all our faculty members and classmates for
their support and truly appreciable knowledge that they provided
us with.

ABSTRACT
Due to its capability to solve the situations of conflict and
competition, Game Theory has been used as a mathematical tool
in economics, politics, biology and human psychology. Nash
Equilibrium, being the solution of a non-cooperative game, gives
a stable state in a sense that no agent/player have any positive
incentive to deviate from its current adopted strategy, when all
others players of the game stick to their current moves. In
Communication Networks, the cooperation to follow a certain
protocol cannot be taken as for granted, keeping in view the
selfish nature of now a days network entities. To cope with the
selfish and competitive behavior of the network entities, Game
Theory provides a feasible solution for resource utilization and
service provisioning. This report presents the detailed overview of
the Game Theory concepts and its applications in the
Communication Networks, both from cooperative and noncooperative perspectives.

INTRODUCTION
Game theory is a study of strategic decision making.
Specifically, it is "the study of mathematical models of conflict
and cooperation between intelligent rational decision-makers".
[1]
An alternative term suggested "as a more descriptive name for
the discipline" is interactive decision theory.[2] Game theory is
mainly used in economics, political science, and psychology, as
well as logic, computer science, and biology. The subject first
addressed zero-sum games, such that one person's gains exactly
equal net losses of the other participant or participants. Today,
however, game theory applies to a wide range of behavioral
relations, and has developed into an umbrella term for the logical
side of decision science, including both humans and non-humans
(e.g. computers, insects/animals).
Modern game theory began with the idea regarding the existence
of mixed-strategy equilibria in two-person zero-sum games and its
proof by John von Neumann. Von Neumann's original proof
used Brouwer fixed-point theorem on continuous mappings into
compact convex sets, which became a standard method in game
theory and mathematical economics. His paper was followed by
the 1944 book Theory of Games and Economic Behavior, cowritten with Oskar Morgenstern, which considered cooperative
games of several players. The second edition of this book
provided an axiomatic theory of expected utility, which allowed
mathematical statisticians and economists to treat decisionmaking under uncertainty.

HISTORY
Early discussions of examples of two-person games occurred long
before the rise of modern, mathematical game theory. The first
known discussion of game theory occurred in a letter written
by James Waldegrave in 1713.[42] In this letter, Waldegrave
provides a minimax mixed strategy solution to a two-person
version of the card game le Her. James Madison made what we
now recognize as a game-theoretic analysis of the ways states
can be expected to behave under different systems of taxation. [43]
[44]
In his 1838 Recherches sur les principes mathmatiques de la
thorie des richesses (Researches into the Mathematical
Principles of the Theory of Wealth), Antoine Augustin
Cournot considered a duopoly and presents a solution that is a
restricted version of the Nash equilibrium.

 The concepts of game theory provide a language to

formulate,
structure,
analyze,
and
understand
strategic scenarios.
These agents may be individuals, groups, fi rms, or
any combination of these.
Game theoretic concepts apply whenever the actions
of several agents are interdependent.
Game theory is the formal study of confl ict and
cooperation between intelligent rational decisionmakers.

DEFINITIONS OF GAME THEORY

Game theory received special attention with the
awarding of the Nobel prize in economics to Nash,
John Harsanyi, and Reinhard Selten.
the monumental volume Theory of Games and
Economic Behavior by von Neumann and the
economist Oskar Morgenstern
The mathematician Emile Borel suggested a formal
theory of games , which was furthered by the
mathematician John von Neumann in 1928 ,in a
theory of parlor games.
The earliest example of a formal game-theoretic
analysis is the study of a duopoly by Antoine
Cournot

1994

1944
1921
1838

DEFINITION OF GAMES
A game is
situation.

formal

description

of

strategic

The object of study in game theory is the game,

which is a formal model of an interactive situation.

It typically involves several players; a game with

only one player is usually called a decision problem.

The formal defi nition lays out the players, their

preferences, their information, the strategic actions
available to them, and how these infl uence the
outcome.

TYPES OF GAME THEORY

COOPERATIVE GAME THEORY
A coalitional (or cooperative) game is a high-level
description, specifying only what payoff s each
potential group, or coalition, can obtain by the
cooperation of its members. What is not made explicit
is the process by which the coalition forms.

 Cooperative
game
theory
investigates
such
coalitional games with respect to the relative
amounts of power held by various players, or how a
successful coalition should divide its proceeds. This is
most naturally applied to situations arising in political
science or international relations, where concepts like
power are most important.

NON-COOPERATIVE GAME THEORY

Noncooperative game theory is concerned with the
analysis of strategic choices. The paradigm of
noncooperative game theory is that the details of the
ordering and timing of players choices are crucial to
determining the outcome of a game.
The term noncooperative means this branch of
game theory explicitly models the process of 6
players making choices out of their own interest.
Cooperation
can,
and
often
does,
arise
in
noncooperative models of games, when players fi nd it
in their own best interests.

FORWARDERS DILEMMA
If player p1 forwards the packet of p2, it costs player
p1 a fi xed cost 0 < C << 1, which represents the
energy and computation spent for the forwarding
action. By doing so, he enables the communication
between p2 and dst2, which gives p2 a benefi t of 1.

 The dilemma is the following: Each player is tempted

to drop the packet he should forward, as this would
save some of his resources; but if the other player
reasons in the same way, then the packet that the
fi rst player wanted to send will also be dropped. They
could, however, do better by mutually forwarding
each others packet. Hence the dilemma.

JOINT PACKET FORWARDING GAME

A Source src wants to send a packet to his destination
dst in each time step. To this end, he needs both
devices p1 and p2 to forward for him.
Similarly to the previous example, there is a
forwarding cost 0 < C << 1 if a player forwards the
packet of the sender. If both players forward, then
they each receive a benefi t of 1. We show this packet
forwarding scenario in Figure 2.

MULTIPLE ACCESS GAME

Suppose that there are two players p1 and p2 who
want to access a shared communication channel to

send some packets to their receivers re1 and re2

respectively.
We assume that each player has one packet to send
in each time step and he can decide to access the
channel to transmit it or to wait.
If player p1 transmits his packet, it incurs a sending
cost of 0 < C << 1. The packet is successfully
transmitted if p2 waits in that given time step (i.e.,
he does not transmit), otherwise there is a collision. If
there is no collision, player p1 gets a benefi t of 1
from the successful packet transmission.

THE JAMMING GAME

We assume that player p1 wants to send a packet in
each time step to a receiver re1. In this example, we
assume that the wireless medium is split into two
channels x and y according to the Frequency Division
Multiple Access (FDMA) principle
The objective of the malicious player p2 is to prevent
player p1 from a successful transmission by
transmitting on the same channel in the given time
step. In wireless communication, this is called
jamming.
Clearly, the objective of p1 is to succeed in spite of
the presence of p2. Accordingly, he receives a payoff
of 1 if the attacker cannot jam his transmission and
he receives a payoff of -1 if the attacker jams his
packet. The payoff s for the attacker p2 are the
opposite of those of player p1.

NASH EQUILIBRIUM
In the previous examples, consideration of dominating strategies
alone yielded precise advice to the players on how to play the
game. In many games, however, there are no dominated
strategies, and so these considerations are not enough to rule out
any outcomes or to provide more specific advice on how to play
the game.
The central concept of Nash equilibrium is much more general. A
Nash equilibrium recommends a strategy to each player that the
player cannot improve upon unilaterally, that is, given that the
other players follow the recommendation. Since the other players
are also rational, it is reasonable for each player to expect his
opponents to follow the recommendation as well.

APPLICATIONS
COGNITIVE RADIO
Lane:
spectru
m
Lane
seldom
used but
reserved

Public
Traffic
Lane
congeste

POWER CONTROL IN CELLULAR NETWORK