Game Theory and the Decision-Making Process in Military Affairs

Assuming that any decision-maker will maximize the expected value of some utility function, we will find different methods to decide which action among all possible alternatives could be the most appropriate according to our interests. If we use, for example, a multi-criteria decision-making approach we would conduct an analysis arranging all relevant factors in a hierarchical structure. With a cost-benefit analysis our focus will be directed to assess the strengths and weaknesses of all possible options to determine the decision that gives us the highest possible net payoff. There are other situations where the outcome will not only depend on one’s own decision but also on that of other actors, and vice versa. These would be the so-called interdependent decisions. In such cases we might be interested in gathering information other than the one needed for a cost-benefit or a multi-criteria analysis, like information about the intentions of other decision-makers who are involved. Game theory represents a part of decision theory, where two or more decision-makers are involved in the result. To carry out these analyses we assume decision-makers to be intelligent and rational. The meaning of being intelligent in the context of game theory refers to the assumption that each player will not only know his possible payoffs and strategies but also his enemy’s. Therefore, he will be able to make any inference about the game that any other external observer sharing the same information would be able to make, too. Game theory aims to analyze situations of conflict and cooperation by means of mathematical models. The resulting models should provide guidance for either player when having to choose a strategy in order to achieve a good or possibly the best outcome.