Non-zero sum games, Managerial Accounting

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Non-Zero Sum Games

Within very vast situations of possible non-zero games, varying degrees of co-operation exist between the participants. Games theory has been sufficiently developed to deal with two extreme forms—the co-operative game and non-cooperative game.

In a co-operative game, the players have complete freedom to communicate with each other.  They can make threats; enter into agreements favorable to them. They can freely negotiate and enter into binding agreements. In a non-cooperative game there is no communication between the participants and no way of enforcing agreements.

Prisoner's dilemma games, battle of sexes games, chicken and Hawk (dove game) are all illustrations of non-zero sum games.


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