Game Theory is quite interesting subject that takes our attention towards Russell Crowe’s movie ‘A beautiful mind’ based on biography of American Mathematician J.F. Nash who got Nobel prize in 1994. The Movie shows that how every competition does not lead to Pareto efficient. We are all bounded with dualism of game. There is a James Bond movie, how a man finally agrees to offer his wife to James Bond for a night for $1m. Though he first refuses and says go to hell, but next day when James Bond comes with money to persuade again to sleep with his wife, money makes him blind and he finally changed his mind to offer his wife to James Bond for a night. It’s only game.
Nash has proved that Adam Smith’s Invisible hand does not work with all situation. When everybody competes to get the attention of the blonde girl, but nobody will end up with that girl. As Nash Equilibrium shows only one player can reach at equilibrium while others will end up with nothing. So, it’s better to go for a brunette than to end up with nothing, Nash argues.
It’s clear that we all are bounded over dualism. We are often undecided/indifference to make choices. But, Economics is powerful by defining all complexities that affects our daily life. And Game theory is well defined to help us.
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