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which is the math needed for GAME THEORY ?

also does this game theory work in gambling or games that have an element of 'luck' or do they only work for strategic games =?? (Chess)

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  • $\begingroup$ I am not sure if game theory is applicable to games of chance; however probability theory can definitely be applied to games of chance, and there are textbooks available which go into great detail on the subject. $\endgroup$ – mathfan27543 Nov 16 '16 at 20:16
  • $\begingroup$ I would recommend getting acquainted with Finite State Machines. If each input signal is a pair of objects (inputs from the two players), the FSM becomes a multi-step model of a two-player game. The book by Von Neumann and Morgenstern on game theory is still a classic and pleasant reading. $\endgroup$ – avs Nov 16 '16 at 20:20
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You don't need much math beyond simple algebra to appreciate some basic insights of game theory--Schelling got the Nobel Prize in economics for the simple but insightful models of The Strategy of Conflict. On the other hand much modern work uses advanced math such as fixed-point theorems. There are many good textbooks that give an idea of what is used. My favorite is A Course in Game Theory by Osborne and Rubinstein, at the advance undergrad or early grad student level.

Game theory does work on games of chance, as long as there is a strategic element (what the other guy does matters to you), so for example Poker is one game that can be analyzed. Indeed, von Neumann and Morgenstern axiomatized expected utility to deal with chance elements. A very simple but revealing discussion of the issue is in How to Take a Chance by Huff and Geis (who brought you How to Lie with Statistics).

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