GAME THEORY RELAUNCHED Edited by Hardy Hanappi Game Theory Relaunched http://dx.doi.org/10.5772/2563 Edited by Hardy Hanappi Contributors Hardy Hanappi, Riccardo Alberti, Atulya K. Nagar, Eizo Akiyama, Ryuichiro Ishikawa, Mamoru Kaneko, J. Jude Kline, Naima Saeed, Odd I. Larsen, Sheng Zeng, Emmanuel Fernandez, Alberto Garcia-Diaz, Dong-Ju Lee, Mohamed Baslam, Rachid El-Azouzi, Essaid Sabir, Loubna Echabbi, El-Houssine Bouyakhf, Senka Hadzic, Shahid Mumtaz, Jonathan Rodriguez, Hisao Kameda, Anjiao Wang, Zhongxing Ye, Yucan Liu, Dariusz G. Mikulski, Antoniou Josephina, Lesta Papadopoulou Vicky, Libman Lavy, Pitsillides Andreas, David Schneider, A.M. Kowalski, A. Plastino, M. Casas, Alireza Chakeri, Nasser Sadati, Guy A. Dumont, Paul A. Wagner Published by InTech Janeza Trdine 9, 51000 Rijeka, Croatia Copyright © 2013 InTech All chapters are Open Access distributed under the Creative Commons Attribution 3.0 license, which allows users to download, copy and build upon published articles even for commercial purposes, as long as the author and publisher are properly credited, which ensures maximum dissemination and a wider impact of our publications. After this work has been published by InTech, authors have the right to republish it, in whole or part, in any publication of which they are the author, and to make other personal use of the work. Any republication, referencing or personal use of the work must explicitly identify the original source. Notice Statements and opinions expressed in the chapters are these of the individual contributors and not necessarily those of the editors or publisher. No responsibility is accepted for the accuracy of information contained in the published chapters. The publisher assumes no responsibility for any damage or injury to persons or property arising out of the use of any materials, instructions, methods or ideas contained in the book. Publishing Process Manager Oliver Kurelic Typesetting InTech Prepress, Novi Sad Cover InTech Design Team First published March, 2013 Printed in Croatia A free online edition of this book is available at www.intechopen.com Additional hard copies can be obtained from orders@intechopen.com Game Theory Relaunched, Edited by Hardy Hanappi p. cm. ISBN 978-953-51-1078-1 Contents Preface IX Section 1 Game Theory in the Social Sciences 1 Chapter 1 The Neumann-Morgenstern Project – Game Theory as a Formal Language for the Social Sciences 3 Hardy Hanappi Chapter 2 Can Deterrence Lead to Fairness? 27 Riccardo Alberti and Atulya K. Nagar Chapter 3 Inductive Game Theory: A Simulation Study of Learning a Social Situation 55 Eizo Akiyama, Ryuichiro Ishikawa, Mamoru Kaneko and J. Jude Kline Chapter 4 A Tale of Two Ports: Extending the Bertrand Model Along the Needs of a Case Study 77 Naima Saeed and Odd I. Larsen Section 2 Game Theory in Engineering 105 Chapter 5 A Game Theoretic Approach Based Adaptive Control Design for Sequentially Interconnected SISO Linear Systems 107 Sheng Zeng and Emmanuel Fernandez Chapter 6 Models for Highway Cost Allocation 135 Alberto Garcia-Diaz and Dong-Ju Lee Chapter 7 A Game Theoretic Analysis of Price-QoS Market Share in Presence of Adversarial Service Providers 157 Mohamed Baslam, Rachid El-Azouzi, Essaid Sabir, Loubna Echabbi and El-Houssine Bouyakhf VI Contents Chapter 8 Cooperative Game Theory and Its Application in Localization Algorithms 173 Senka Hadzic, Shahid Mumtaz and Jonathan Rodriguez Section 3 Game-Theoretic Mathematics 189 Chapter 9 Models of Paradoxical Coincident Cost Degradation in Noncooperative Networks 191 Hisao Kameda Chapter 10 On the Long-Run Equilibria of a Class of Large Supergames 215 Anjiao Wang, Zhongxing Ye and Yucan Liu Chapter 11 Cooperative Trust Games 233 Dariusz G. Mikulski Chapter 12 A Graphical Game for Cooperative Neighbourhoods of Selfishly Oriented Entities 251 Antoniou Josephina, Lesta Papadopoulou Vicky, Libman Lavy and Pitsillides Andreas Section 4 Game Theory in Transdisciplinary Contexts 269 Chapter 13 Geometrical Exploration of Quantum Games 271 David Schneider Chapter 14 Physical Realization of a Quantum Game 293 A.M. Kowalski, A. Plastino and M. Casas Chapter 15 Nash Equilibrium Strategies in Fuzzy Games 309 Alireza Chakeri, Nasser Sadati and Guy A. Dumont Chapter 16 Game Theory as Psychological Investigation 325 Paul A. Wagner Preface The scientific discipline called game theory has now reached the age of 71, the age which reminds ordinary human individuals of retirement. Fortunately enough, profound scientific achievements do not lose their powers at the same speed as their human creators. If they provide exciting new ideas and are able to stimulate a broader scientific community, then they can become a public good, a precious intellectual heritage, which is passed on from generation to generation of researchers. And even if such theories are proven to be only special cases of a more general approach, or are even falsified, their preliminary impasses or mistakes are usually acknowledged as necessary steps towards state-of-the art knowledge. There is no need for a pension system; such a theory lives on as an ingredient of ever expanding human knowledge. When game theory entered the scientific arena in the 40s of the last century, it was a highly acclaimed new star. A star launched by one of the most admired mathematical geniuses of the century, John von Neumann. In contrast to these high aspirations, the name of the new discipline - ‘Game Theory’ – at first sight suggested that it might be not really a serious scientific project. It reminded of playing games, of card games like poker, or board games like chess, or even of children not being able to understand how to spend time in serious activities and thus having to train their abilities in metaphorical game play. The tension between the most stern and most abstract scientific discipline, mathematics, on the one hand, and on the other hand, the reference to the homo ludens, the fun of exploring reality by acting in sheltered simulated contexts, explains to some extent why game theory immediately was attractive to many young scientists on both sides of the Atlantic. It also explains why any attempt to change this name (some more ‘serious’ researchers have proposed to call it Theory of Strategic Behavior) should be avoided. Game theory still thrives on its ability to be sufficiently rigorous and open to a wide range of metaphorical game play at the same time. This is why it is so charming. Additional profile came from the science onto which its two creators, John von Neumann and Oskar Morgenstern, decided to graft the new apparatus: economic theory. After the Great Depression of the world economy in the 30s, few scientific disciplines were visibly in a more disastrous state than economics. In tight cooperation with the trained economist Morgenstern, the extremely ambitious John von Neumann jumped on this subject to revolutionize it. But in doing so, the two underestimated the X Preface resistance against deep changes, which is an unavoidable characteristic of established researchers trying to defend their own, with life-long great difficulties acquired, intellectual capital. The relatively sudden dismissal of game theory as a scientific fashion, immediately after John von Neumann’s death in the 50s, certainly has another root in the long-run upswing of a reconstructing world economy, which seemed to need no revolutionized economic theory. Some piece-meal social engineering based on Keynes ideas, plus the mathematical framework of Paul Samuelson’s ‘Neoclassical Synthesis’, seemed to be good enough to run the show. In economic theory, game theory was out, and left to some mathematical ‘nerds’ who were mainly elaborating refinements along the lines of John Nash’s equilibrium approach to game-theoretic questions. But ignorance of the economic mainstream could not kill the beast. The last three decades saw a slowly starting, but exponentially rising influence of game theory in surprisingly different fields of science. In its old domain, the social sciences (mainly political economy), it is now hard to imagine that an innovative paper can succeed without at least apologizing for why it doesn't use a more appropriate game-theoretic approach. But in many other areas – from biology via abstract network theory to ICT engineering – game-theoretic modeling has reappeared as an indispensable tool. This is the very reason why this book is called ‘Game Theory Relaunched’. Which parts of game theory are used, and which kind of further development is contributed to game theory by the respective research, does, of course, assume different forms, which in turn depends on the respective discipline. Game theory is still not a finalized body of knowledge – and (as chapter 1 argues) will not be for a very long time to come. Many existing textbooks on game theory therefore spend most of their pages on describing the very specific history of refinements of Nash’s equilibrium concept – and mention the actually happening renaissance of game-theoretic thought across different disciplines and engineering activities as an exotic outlier at best. The collection in this book takes a different perspective; it proceeds along the lines of currently developed game-theoretic work. At the current stage of the renaissance of game theory, all that can be done is to collect and to structure the diverse contributions: The book thus consists of four parts containing (1) social science oriented chapters, (2) chapters related to engineering problems, (3) chapters enhancing the mathematics of game theory, and (4) chapters that stress the transdisciplinary character of game theory. By working through this mosaic of building blocks of game theory, the reader can hopefully get an impression of the breadth and depth of the intellectual potential, which the founders of this theory had envisaged. All the chapters have been written by different authors spread all over the globe, and thus showing how international the game theoretic community already is these days. It has been my honor to collect and edit their contributions, but the intellectual surplus they produced is completely their own merit. Special thanks have to also go to InTech Publisher, and in particular to publishing process manager Oliver Kurelic, whose . book is called Game Theory Relaunched . Which parts of game theory are used, and which kind of further development is contributed to game theory by the. GAME THEORY RELAUNCHED Edited by Hardy Hanappi Game Theory Relaunched http://dx.doi.org/10.5772/2563