Figure 1: Illustration of game theory.
From: Navigable networks as Nash equilibria of navigation games
Alice and Bob are happy only if they go out to the movies together, but the level of their happiness depends on what movie they watch. The basic notions of a game: Players: Alice and Bob; strategies: go to see an action or a romantic movie; payoffs: the level of happiness 0,1,2,3; Nash equilibria: situations in which the players cannot be happier by unilaterally modifying their strategies. Among all the possible states (a–d) in the figure, states (a) and (d) are equilibria when Alice and Bob go together to watch a movie. State (a) is the global optimum since the total happiness 3+2=5 is maximized.
