---
title: "Game theory"
chunk: 5/13
source: "https://en.wikipedia.org/wiki/Game_theory"
category: "reference"
tags: "science, encyclopedia"
date_saved: "2026-05-05T03:56:32.715747+00:00"
instance: "kb-cron"
---

The extensive form can be used to formalize games with a time sequencing of moves. Extensive form games can be visualized using game trees (as pictured here). Here each vertex (or node) represents a point of choice for a player. The player is specified by a number listed by the vertex. The lines out of the vertex represent a possible action for that player. The payoffs are specified at the bottom of the tree. The extensive form can be viewed as a multi-player generalization of a decision tree. To solve any extensive form game, backward induction must be used. It involves working backward up the game tree to determine what a rational player would do at the last vertex of the tree, what the player with the previous move would do given that the player with the last move is rational, and so on until the first vertex of the tree is reached.
The game pictured consists of two players.  The way this particular game is structured (i.e., with sequential decision making and perfect information), Player 1 "moves" first by choosing either F or U (fair or unfair). Next in the sequence, Player 2, who has now observed Player 1's move, can choose to play either A or R  (accept or reject). Once Player 2 has made their choice, the game is considered finished and each player gets their respective payoff, represented in the image as two numbers, where the first number represents Player 1's payoff, and the second number represents Player 2's payoff.  Suppose that Player 1 chooses U and then Player 2 chooses A: Player 1 then gets a payoff of "eight" (which in real-world terms can be interpreted in many ways, the simplest of which is in terms of money but could mean things such as eight days of vacation or eight countries conquered or even eight more opportunities to play the same game against other players) and Player 2 gets a payoff of "two".
The extensive form can also capture simultaneous-move games and games with imperfect information. To represent it, either a dotted line connects different vertices to represent them as being part of the same information set (i.e. the players do not know at which point they are), or a closed line is drawn around them. (See example in the imperfect information section.)

=== Normal form ===

The normal (or strategic form) game is usually represented by a matrix which shows the players, strategies, and payoffs (see the example to the right). More generally it can be represented by any function that associates a payoff for each player with every possible combination of actions. In the accompanying example there are two players; one chooses the row and the other chooses the column. Each player has two strategies, which are specified by the number of rows and the number of columns. The payoffs are provided in the interior. The first number is the payoff received by the row player (Player 1 in our example); the second is the payoff for the column player (Player 2 in our example). Suppose that Player 1 plays Up and that Player 2 plays Left. Then Player 1 gets a payoff of 4, and Player 2 gets 3.
When a game is presented in normal form, it is presumed that each player acts simultaneously or, at least, without knowing the actions of the other. If players have some information about the choices of other players, the game is usually presented in extensive form.
Every extensive-form game has an equivalent normal-form game, however, the transformation to normal form may result in an exponential blowup in the size of the representation, making it computationally impractical.

=== Characteristic function form ===

In cooperative game theory the characteristic function lists the payoff of each coalition. The origin of this formulation is in John von Neumann and Oskar Morgenstern's book.
Formally, a characteristic function is a function 
  
    
      
        v
        :
        
          2
          
            N
          
        
        →
        
          R
        
      
    
    {\displaystyle v:2^{N}\to \mathbb {R} }
  
 from the set of all possible coalitions of players to a set of payments, and also satisfies 
  
    
      
        v
        (
        ∅
        )
        =
        0
      
    
    {\displaystyle v(\emptyset )=0}
  
. The function describes how much collective payoff a set of players can gain by forming a coalition.

=== Alternative game representations ===

Alternative game representation forms are used for some subclasses of games or adjusted to the needs of interdisciplinary research. In addition to classical game representations, some of the alternative representations also encode time related aspects.