Game Theory Game Theory has been studied ...

Game Theory
Game Theory has been studied and developed over 70 years to study decision making in conflict circumstances (Rasmusen E., 1989). John von Neuman was looking for the solution of decisions making by rationally thinking players in the two-person gambling games (Rasmusen E., 1989). Innovation in theory and application was more important to economics because it fit so well into the methodology of economics. Game Theory is useful in understanding rational human economic behaviour. Then, Game Theory is now broadly applied in various fields as politics, philosophy, sociology, military, logistics, computer networks and telecommunication to describe the situation or predict the best strategy in each situation for achieving the optimal equilibrium.
In each game, the element of game is essential. The common core of the element include the players, the rules of game, the payoff or out comes of the game, the valuations of each payoffs, the variables that each player control, and the conditions during the game (Shubik M., 1955).
The sort of Game Theory can be divided into two main types; the Zero-Sum Game and the Non Zero-Sum Game. The Zero-Sum Game is a game in which the sum of the payoffs of all the players is zero. In other words, the Non Zero-Sum Game is a game which is not zero-sum (Rasmusen E., 1989). The basics of game theory are various such as Cooperative and non-cooperative game, The Prisoner’s Dilemma, Nash equilibrium and Nash bargaining, Potential games, Games with imperfect information, Multi-stage game, Repeated games, Pricing and Incentives, Multi-objectives optimization etc.
The purpose of this literature review is to study the Game Theory which is useful tool to support the business decision-making in the game of business. Then, report reviews the existing application of game theory in Telecommunication Business field, together with the planning for the further research which can be the network pricing and economics, cooperation and competition, security and reputation.
What is Game Theory?
Game Theory is a method for the study of decision-making to determine the best choice which provides the optimum output for the player (Shubik M., 1955). The logic of Game Theory base on the mathematical foundations and this makes the theory a prime tool for modeling and designing the efficient strategic choices for decision-maker. This is because the methodology of theory carefully considers the strategic interplay between each player. As a mathematical tool, it provides for structuring and analyzing problems of strategic choice. The process of formally modeling a situation as a game requires the decision-maker to enumerate explicitly the players and their strategic options including their preferences and reactions and the optimum payoffs (profits, sales, market share growth, etc.) (Di Benedetto C., 1987) An emerging discipline involved in the game theoretic algorithms has the potential of providing a clearer ...