Honors College Theses

Publication Date

4-6-2014

Major

Mathematics (B.S.)

Document Type and Release Option

Thesis (open access)

Faculty Mentor

Dr. Hua Wang

Abstract

Game theory presents a set of decision-makers in a model in order to simulate how they will interact according to a set of rules. The game is set up with a set of players, actions, and preferences. The model allows each player to, in some way, be affected by the actions of all players. Nash equilibrium illustrates that the best action for any given player depends on the other players’ actions, and so, each player must make some assumption about what the competition will do. The goal of this project is to model situations of different car companies to improve our understanding of how they will allocate their resources. In our case, the players will be two car manufacturers. The actions of the players will be how each company invests its resources with some particular vehicle, make or model, and the preferences will be what each company wants to spend the most resources on. The payoff functions will be generated for each player that will also represent the preferences under given assumptions of each player’s activities. By finding the Nash equilibrium of the “game”, a stable activity table will be concluded and compared with the manufacturers’ choices and gains in reality.

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