Non-Cooperative Games

The dynamics of cooperation and competition are essential in understanding the structure of a game being played. Game theory distinguishes between cooperative and non-cooperative game structures. In cooperative games, agents can resort to an institution or third party to enable cooperation and achieve optimal results for all. In non-cooperative games, players cannot form the structures needed to enable cooperation, resulting in suboptimal outcomes. Game theory has historically focused on non-cooperative games, but in reality, situations may involve elements of both. Non-cooperative games may arise due to an inherently zero-sum game, creating a dynamic of competition, or the incapacity to create cooperative structures. The real world of social interaction is full of informal social and cultural institutions designed to enable trust.