As we have recently learned in class, game theory is a great way for companies to decide the most effective strategy in producing product and making the most money they can based off competition. We analyzed an example of this with the two superhero movie companies Marvel and DC. Marvel has the choice to produce movies about Jarvis and Mandarin, and DC can produce movies about Alfred and Joker. Through this example, we can determine that DC has a dominant strategy in producing a movie about the Joker, because profits would be higher than both Marvel movies. The question is, how can an individual use this strategy in poker to find a dominant strategy?
They say poker is a game that takes a life time to master, and there is a reason for that. Poker is a complex game of betting and odds, and people for centuries have been trying to figure out ways to solve it. This is where game theory comes into play. By figuring out a dominant strategy based on your hand and the community cards shown, players can decide whether to effectively call, raise, or fold.
An example is the best way to explain the use of game theory in poker. Let's say a player is dealt a hand of two fives. After the flop and turn, there are another two fives in the community cards. Based on the knowledge that four of a kind is a highly ranked hand, and that it is impossible for another person to have four of a kind this round, the player can strategically bet. Knowing the dominant strategy, the player with this hand can raise their bet accordingly before the river card, and in the last round, maximizing betting and money in the pot.
Players spend years practicing the use of game theory in hopes of playing and betting most effectively. Recognizing dominant strategies gives players a clear advantage over others who do not know this concept. If you're looking to make money like the pros, start studying.
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I really like the ideas you bring up in this blog about game theory. I think it is fascinating how such a complex concept can be reduced to the basic idea that we want to choose the best option in order to succeed. As someone who has played numerous friendly games of poker with friends and family, I can definitely relate to this idea of trying to make the best choice in order to maximize profits and win the hand. It is interesting to know that although we just learned about this concept of game theory, many of us have been practicing this idea throughout or daily lives.
ReplyDeleteI like how your blog post makes the overall concept of game theory (a topic not a lot of people know about) more relatable by connecting it to a game of poker (a game basically everyone knows). I think the post effectively answers a lingering question people had: Is poker a game of luck or skill? Many believe it is luck, but this post disproves that by bringing up the concept of game theory and how understanding this concept can help one make better choices in the game. Although I have never played a game of poker, the adults in my family play it ever year during the holidays. My uncle usually wins as he claims to have mastered the strategy of effectively analyzing his cards to determine whether to call, raise, or fold to maximize his chances of winning.
ReplyDeleteI like your application of game theory to poker because it gives us an example of this concept not directly related to microeconomics. I think looking at an idea across multiple platforms strengthens the understanding of that idea. Although I have never played poker, I see how game theory would relate to the game as it is a way to effectively increase your chances of betting accurately.
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