# What is game theory?

by Stephen M. Walker II, Co-Founder / CEO

## What is game theory?

Game theory in the context of artificial intelligence (AI) is a mathematical framework used to model and analyze the strategic interactions between different agents, where an agent can be any entity capable of making decisions, such as a computer program or a robot. In AI, game theory is particularly relevant for multi-agent systems, where multiple AI agents interact with each other, each seeking to maximize their own utility or payoff.

## What are the key concepts of game theory?

• Rational Agents — Agents are assumed to be rational, meaning they will strive to maximize their own utility based on their preferences.
• Strategies — A strategy is a complete plan of action for every possible situation in a game. Agents select strategies that they expect will yield the best outcomes for themselves.
• Nash Equilibrium — This is a key concept where each agent's strategy is optimal, given the strategies of all other agents. At this point, no agent has an incentive to unilaterally change their strategy.
• Cooperative vs. Non-Cooperative Games — In cooperative games, agents can form alliances to achieve a common goal, while in non-cooperative games, each agent acts independently without collaboration.
• Symmetric vs. Asymmetric Games — Symmetric games are those where all agents have the same goals and only their strategies differ. In asymmetric games, agents may have different goals.

## What are some example applications of game theory in AI?

• Multi-agent Systems — Game theory is used to model the interactions between multiple AI agents, each with their own objectives.
• Imitation and Reinforcement Learning — These learning paradigms can be influenced by game-theoretic concepts, where agents learn strategies based on the actions and rewards of other agents.
• Adversarial Training — In Generative Adversarial Networks (GANs), game theory helps model the interaction between the generator and discriminator, each trying to outperform the other.

An SVM can be described in game-theoretic terms as a game between two players, where one player challenges the other to find the best hyperplane that separates different classes of data. The solution to this game is a trade-off between the strategic abilities of both players.

Game theory provides a rich and robust language for describing and solving problems in AI where multiple decision-makers are involved. It helps in designing algorithms that can operate in competitive or cooperative environments, making it a fundamental tool in the development of intelligent systems.

## What are some challenges associated with using game theory in AI?

1. Complexity — Real-world situations often involve numerous combinations of players, decisions, resources, and agent statuses. Managing these states and considering all possible outcomes can be complex and computationally intensive.

2. Assumptions about Agents — Game theory requires making assumptions about the agents, their preferences, beliefs, and rationality. It can be challenging to model these accurately, especially in dynamic and heterogeneous networks.

3. Incomplete Information — Game theory struggles with scenarios where not all information is available or where information is asymmetrically distributed. For example, in a game like Poker, there are too many combinations of cards and the players' strategies are not fully known.

4. Equilibrium Determination — Finding and interpreting the equilibrium or equilibria of a game can be computationally hard or even impossible for some games. The equilibrium represents the outcomes resulting from the optimal choices of the agents.

5. Rationality of Players — Game theory assumes that all players are rational and will act to maximize their own utility. However, in real-world scenarios, players may not always behave rationally.

6. Predictability in Video Games — In the context of video game AI, using pure game theory concepts can lead to predictable and repetitive gameplay, which may not provide a compelling experience for the player.

Despite these challenges, game theory remains a valuable tool in AI, providing a framework for modeling and analyzing strategic interactions among agents. It's important to note that these challenges also represent areas of ongoing research and potential improvement in the application of game theory to AI.

## How can game theory be used to solve AI problems?

Game theory, a mathematical framework for analyzing strategic interactions among rational decision-makers, has been instrumental in solving various AI problems.

One of the key applications is in Generative Adversarial Networks (GANs), where two neural networks—the generator and the discriminator—engage in a zero-sum game. The generator aims to produce data that mirrors real data, while the discriminator strives to differentiate between real and generated data. Game theory aids in understanding the dynamics of this adversarial training and in identifying equilibrium points where neither network can improve unilaterally.

Game theory also plays a crucial role in multi-agent systems, providing tools for modeling interactions between agents. Whether the agents are competing or cooperating to achieve their goals, game theory assists in predicting the outcomes of these interactions and in designing mechanisms that can lead to desired behaviors, such as cooperation or efficient resource allocation.

In reinforcement learning, game theory is used to model and solve problems where an agent learns to make decisions by interacting with an environment. It provides insights into how agents can learn optimal strategies from observed behavior (imitation learning) or through trial and error (reinforcement learning), especially in scenarios involving multiple agents.

The study of human-machine interaction greatly benefits from game theory, particularly in understanding cooperation. It aids in creating environments that encourage initial cooperation and lead to stable cooperative behaviors in human-AI systems.

Game theory is also applied in cybersecurity and adversarial machine learning, where it models the interaction between attackers and defenders. It assists in designing learning systems that can anticipate and defend against adversarial attacks, taking into account the costs and benefits of both the attacker and the defender.

Research at the intersection of game theory and AI aims to achieve cooperative AI that can navigate social dilemmas and promote cooperation between artificial learners. Game theory can help in creating incentives for cooperation and in understanding the stability of cooperative outcomes.

Despite the successful application of game theory in AI, challenges remain, particularly in handling incomplete information games like Poker, where uncertainty and the vast number of possible combinations make modeling difficult. Future research is directed towards developing techniques to better handle such complexities.

## More terms

### Kardashian Scale

The Kardashian Scale, in the context of AI, refers to a humorous measurement used to gauge the level of intelligence or sophistication of an AI system. It is named after the Kardashian family, known for their popularity and perceived lack of intellectual depth, with lower scores on the scale indicating less advanced AI capabilities. While not a widely recognized metric in the field of AI, some researchers use it as a lighthearted way to illustrate the limitations and challenges of current AI technology.

### LLM Alignment

LLM Alignment ensures the safe operation of Large Language Models (LLMs) by training and testing them to handle a diverse array of inputs, including adversarial ones that may attempt to mislead or disrupt the model. This process is essential for AI safety, as it aligns the model's outputs with intended behaviors and human values.