Algorithmic game theory: Difference between revisions

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==The Internet as a catalyst==

theThe Internet created a new economy—both as a foundation for exchange and commerce, and in its own right. The computational nature of the Internet allowed for the use of computational tools in this new emerging economy. On the other hand, the Internet itself is the outcome of actions of many. This was new to the classic, ‘top-down’ approach to computation that held till then. Thus, game theory is a natural way to view the Internet and interactions within it, both human and mechanical.

Game theory studies equilibria (such as the [[Nash equilibrium]]). An equilibrium is generally defined as a state in which no player has an incentive to change their strategy. Equilibria are found in several fields related to the Internet, for instance financial interactions and communication load-balancing{{Citation needed|date=September 2010}}. Game theory provides tools to analyze equilibria, and a common approach is then to ‘find the game’—that is, to formalize specific Internet interactions as a game, and to derive the associated equilibria.