Introduction to Game Theory

Ever wondered what happens when the heat of a Paris summer meets the complexity of Game Theory? 🔥  I sure found out, and not in the way I expected. Enrolled in what I thought would be a 'beginner's course' at the Paris School of Economics, I soon found out I was way out of my depth. Between the heat and the advanced material, I'll be honest: I didn't learn as much as I'd hoped 😅 But it made me curious and I started learning more about it by myself.

Game Theory is basically the study of strategy. It looks at the choices we make when those choices aren't just about us but also about what others decide to do. It's like trying to figure out your next move in chess, knowing that what you do depends on what your opponent does.

You might have heard about the Prisoner's Dilemma, a classic example in game theory that illustrates the conflict between individual and collective interests. In this scenario, two participants must choose between cooperating or betraying without knowing the other's choice. The dilemma arises because, while mutual cooperation yields the best collective outcome, without trust, participants often betray each other, leading to worse results for both.

Among the various strategies to navigate such dilemmas, one that stands out is "Tit for Tat." It's a simple yet effective approach where an individual mirrors the other's previous action. In essence, it involves responding to an opponent's action with similar action: cooperation for cooperation, betrayal for betrayal. It’s a straightforward strategy that emphasizes the power of reciprocity and can lead to cooperation more often than not.

One key takeaway from game theory is that working together often gets you further than going at each other's throats. 
Understanding what drives people and finding common ground can lead to better outcomes for everyone involved. It’s about focusing on mutual benefits rather than immediate wins.

The practical applications of game theory are vast and varied. In economics, it helps in understanding market dynamics and the behaviour of firms. In international relations, game theory is used to analyse strategic interactions among countries. It also has applications in evolutionary biology, where it aids in understanding the behaviour and strategies of different species.

And as for the Parisian summer heat? Well, if there's one thing I learned, it's that some situations call for cooperation, and others, like trying to outsmart the weather, remind you that some games you just can't win 😎