Systemic Game Theory: Werterian Approach

The equilibrium in a game changes once additional information is being introduced. The equilibrium as we know it in game theory becomes absolute when we are looking at the system in which the game is played and who the players are, not only at the game. I make the distinction between the current stand of game theory and the systemic game theory. I critique the current stand of game theory. It stagnated and became an inert system that does not represent actual situation in the world. I am looking for answers to questions like: taken into consideration not only the players and the game, but also, the experiences that the players have and the system in which the game is played, how does the solution of the specific game change (or, how does the game change)? Under what assumptions is a game transformed? How is it transformed? Game theory, presently, is a photo camera: it takes a snapshot at the players and the game. Because of this, it creates a two dimensional (2D) image. It has been argued, and rightfully so, that the theory is an idealistic one in which the games as well as the players, are �ideal�. If one looks at the world, one realizes that it is not two dimensional, but a three dimensional system that is not ideal. Systemic game theory takes into consideration the system in which a specific game is played. The types of players are analyzed and categorized. In general, people want the maximal benefits (payoffs) with the minimal involvement. Systemic game theory takes into account almost all factors that influence the players and the game in any way. Regarding the players, we have two main types: rational and irrational. I can state that the rational player is using an egoistic judgment: the more he gets the better it is (I call this the 1st level of rationality). For this player, any other method of judgment is irrational. Regarding the irrational player, we can characterize him in two ways: idiot; or altruistic (I call the altruistic approach the 2nd level of rationality). The players can have three possible strategies characterized by their psychological aspect: maximizers, deniers, and cooperators. A new methodology of analysis is introduced. There is a return to the scientific method. After describing the overarching system and provide some useful tools: multiplicative multiattribute utility models; Klee�s algorithm; Churchman and Ackoff approximate measure of value; global convergence; method of dimensional analysis. Using these operational devices, we can distinguish what are the important characteristics of the players and the game and we can combine them. The less important elements are discarded, and the end analysis becomes more representative of real life. 2×2 matrix examples are given in support of this new methodology. Analogous as well as polar strategies are analyzed in specific games. Moreover, I am looking at systemic game theory through an economic mirror. I analyze real world circumstances; that is why I am looking also at games without equilibrium. Even in games in which game theory cannot find an equilibrium because it does not exist, systemic game theory has methods of finding the higher power point using higher power strategies. Moreover, my approach takes in consideration what the players want: to achieve the higher power point, or not to achieve it. At the end of my paper, I compare current game theory and systemic game theory. One can see the theoretical differences. Some of the axioms of the first theory do not hold in the second one. In order to be more specific and accurate regarding situations of the real world, one must not analyze them with the current approach of game theory. Systemic game theory gives the best approach to life and it is a better and precise tool. Looking at the broader picture, one can understand and predict specific situations, outcomes in the real world, not only in a laboratory.