## Game Theory and Technology

While results from social scientists about game theory, especially equilibrium and markets, have been viewed as important, engineers did not apply them to their work. Now it seems we have reached a point where engineers will rely more on game theory to solve problems. It does seem like it will be applicable. Many problems can be modeled as a type of game where we have different players and they have different payoffs for their actions. Engineering problems usually aim to increase payoff in some sense. Computer science can also be applied to finding an equilibrium. Many problems cannot be computed efficiently, but there are algorithms which allow fast computation of approximate “best” solutions. In real world, achieving 99% efficiency may be very useful, and definitely better than doing no optimization at all. The article does start by talking about simple games such as penalty kicks in soccer, but does explore very complex games with many players where an approximate solution may be the only one we can feasibly compute. Seeing the application of game theory to engineering problems is exciting because it can improve the world. The applications the article talks about, power usage and traffic flow, are definitely useful, but not the only types of important problems a game theoretic approach may be able to solve. Clearly, game theory is a popular field in economics for a reason: it’s many and broad applications.

This article relates to game theory which we discuss in class. The article mentions matching markets as well as Nash equilibrium. It talks about different applications of these economic concepts to technology. This article explains how game theory cannot be used not just for competition but also cooperation, but in these types of games, we are trying to maximize total payoff. It is interesting to see how what we learned in class is being applied to problems today.

Link: http://www.technologyreview.com/article/515481/gaming-the-system/