chapter  Chapter 4
14 Pages

Game Theory and Cryptoeconomics

WithJian Gong, Wei Xu

Game theory is an analysis toolkit which is designed to help us to understand the observed phenomena of interactions between decision-making bodies. Basic assumption implied by this theory is that decision-makers pursue determined external goals and consider their own knowledge or the expectations of other decision-making actors. Game theory considers the predictive behavior and actual behavior of individuals in a group environment with specific rules. The classification of the game also has different classifications according to different benchmarks. It is generally believed that games can be mainly divided into cooperative games and non-cooperative games. According to the degree of understanding of the participants to other participants, they are divided into a complete information game and an incomplete information game. Schelling point is the tendency of people in game theory to choose without communication. The design of the consensus mechanism on the blockchain is most similar to the design of the game theory mechanism.