A Game Theory Approach Using Excel

Abstract

Understanding the behavior of companies in market conditions has been an important topic of studies for the economists and mathematicians. Many companies have treated their relationship of service providers as a game. Thus, the attitudes of the players can be endowed with rational thinking, which leads to the conclusion that the use of game theory as a tool to understand such behavior is of great importance. Based on the previous studies, this paper presents a study on the cooperative game theory, discussing the Nash equilibrium in pure and mixed strategies, treating solutions using the minimax John Von Neumann theorem and illustrating a mathematical modeling of a game theory problem. Furthermore, a solution of linear programming using Microsoft Excel is also proposed and presented. The methodology adopted to model the problem may help students to familiarize themselves to game theory.