TWO-PERSON ZERO-SUM GAME - Quantitative Techniques for management

Two Person Zero Sum Game Problems

Zero-sum games refer to games of pure conflict. The payoff of one player is the negative of the payoff of the other player. This formulation is probably appropriate for most parlor games, where the outcomes are either win, lose, or draw (and there is at most one winner or loser). Maybe it describes war. It is a restrictive assumption and is not appropriate to most economic applications, where there is a strong component of common interests mixed with the conflict.

A game in a competitive situation possesses the following properties:

  1. The number of players is finite.
  2. Each player has finite list of courses of action or strategy.
  3. A game is played when each player chooses a course of action (strategy) out of the available strategies. No player is aware of his opponent’s choice until he decides his own.
  4. The outcome of the play depends on every combination of courses of action. Each outcome determines the gain or loss of each player.

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