In game theory, a solution concept is a formal rule for predicting how a game will be played. These predictions are called "solutions", and describe which strategies will be adopted by players and, therefore, the result of the game. The most commonly used solution concepts are equilibrium concepts, most famously Nash equilibrium.
Many solution concepts, for many games, will result in more than one solution. This puts any one of the solutions in doubt, so a game theorist may apply a refinement to narrow down the solutions. Each successive solution concept presented in the following improves on its predecessor by eliminating implausible equilibria in richer games.
Read more about Solution Concept: Formal Definition, Rationalizability and Iterated Dominance, Nash Equilibrium, Backward Induction, Subgame Perfect Nash Equilibrium, Perfect Bayesian Equilibrium, Forward Induction
Famous quotes containing the words solution and/or concept:
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—Ralph Waldo Emerson (1803–1882)
“By speaking, by thinking, we undertake to clarify things, and that forces us to exacerbate them, dislocate them, schematize them. Every concept is in itself an exaggeration.”
—José Ortega Y Gasset (1883–1955)