The construction of an Ordinal Utility Function
is, thus, made simple. The indifference sets are numbered from 1 to n.
These ordinals do not reveal the INTENSITY or the RELATIVE INTENSITY of
a preference - merely its location in a list. However, techniques are
available to transform the ordinal utility function - into a cardinal
one.
A Stable Strategy is similar to a Nash solution - though not identical
mathematically. There is currently no comprehensive theory of
Information Dynamics. Game Theory is limited to the aspects of
competition and exchange of information (cooperation). Strategies that
lead to better results (independently of other agents) are dominant and
where all the agents have dominant strategies - a solution is
established. Thus, the Nash equilibrium is applicable to games that are
repeated and wherein each agent reacts to the acts of other agents. The
agent is influenced by others - but does not influence them (he is
negligible). The agent continues to adapt in this way - until no longer
able to improve his position. The Nash solution is less available in
cases of cooperation and is not unique as a solution. In most cases,
the players will adopt a minimax strategy (in zero-sum games) or
maximin strategies (in nonzero-sum games).
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