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:
“Give a scientist a problem and he will probably provide a solution; historians and sociologists, by contrast, can offer only opinions. Ask a dozen chemists the composition of an organic compound such as methane, and within a short time all twelve will have come up with the same solution of CH4. Ask, however, a dozen economists or sociologists to provide policies to reduce unemployment or the level of crime and twelve widely differing opinions are likely to be offered.”
—Derek Gjertsen, British scientist, author. Science and Philosophy: Past and Present, ch. 3, Penguin (1989)
“The concept of a person is logically prior to that of an individual consciousness. The concept of a person is not to be analysed as that of an animated body or an embodied anima.”
—Sir Peter Frederick Strawson (b. 1919)