Industrial Engineering Mechanical Engnieering Dep.

A - Wald standard (pessimistic standard)

It is a criterion in which the course seeks to obtain the best output from the
results confirmed, and thus it is in each strategy is sure that what will be
obtained will not be less than the worst output and therefore choose the worst
output of each strategy.
Example / The following matrix are the matrix available for the manager and it
is a profit matrix in $ for four strategies and four nature cases:

States of nature
Strategies
Y1 Y2 Y3 Y4
X1 15 20 21 52
X2 16 11 15 18
X3 24 10 9 15
X4 18 20 6 11

Answer: The worst thing that happens in this case and in each strategy is the
following
Strategies The worst case
X1 15
X2 11
X3 9
X4 6

Resultant: Strategy X1 is used

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B- Leonid Hurwicz Standard

It combines the worst output and the best output for each strategy. The
relationship between optimism and pessimism is

The amount of optimism + the amount of pessimism = 1

If the course is not optimistic, the number chosen (optimism coefficient) is close
to zero and if it is very optimistic then choose the number (1) and if less than
full optimism, the coefficient of optimism will be (0.6, 0.5, 0.4) To illustrate
this criterion take the previous example.

Example / Find the optimal decision of the profit matrix in the previous
example according to Leonid Horizon's standard.

The solution/
1. Calculate the coefficient of pessimism = 0.6 - 1 = 0.4
2. We calculate the best and worst figures in each strategy

strategy worst number The best numbers

X1 15 52
X2 11 18
X3 9 24
X4 6 20

3. Calculate the expected value of each strategy through the following

relationship:

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Expected Value Strategy = (Best number * Amount of Optimism) + (Worst

number * Amount of Pessimism)

Expected value X1 = 0.6 * 52 + 0.4 * 15 = 37.2

X2 = 0.6 * 18 + 0.4 * 11 = 15.2
X3 = 0.6 * 24 + 0.4 * 9 = 18
X4 = 0.6 * 20 + 0.4 * 6 = 14.4
4. Resolution: The best decision is to use the X1 strategy

C- Laplace Standard
The method used in this standard is that if we do not have any information
about the probability of nature occurring, it is better to assume equal
probabilities.

Example / For the previous example find the best strategy according to the
standard Laplace.
Answer /
1-Calculate the arithmetic average of each strategy according to Laplace
criterion as follows:
strategy Arithmetic average
X1 (52+21+20+15)/ 4 = 27
X2 (18+15+11+16)/ 4 = 15
X3 (15+9+10+24)/ 4 = 14.5
X4 (11+6+20+18)/ 4 = 13.75

2- The optimal decision / strategy is X1

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D - Regret standard
This criterion looks at the remorse felt by the decision after making the
decision. If he did not take the optimal decision, he felt remorse by the
difference between the highest output in the case of nature and the result
obtained.

Example / Find the best strategy for the previous matrix using the regret
standard?
States of nature
Strategies
Y1 Y2 Y3 Y4
X1 15 20 21 52
X2 16 11 15 18
X3 24 10 9 15
X4 18 20 6 11
Original matrix (profit matrix)

1-The profit matrix is converted to the regret matrix by taking the maximum
value in each column and subtracting it from the elements of the same column

States of nature
Strategies
Y1 Y2 Y3 Y4
X1 9 0 0 0
X2 8 9 6 34
X3 0 10 12 37
X4 6 0 15 41
regret matrix

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2-After converting the original matrix to the regret matrix, the Wold standard is
applied to obtain the worst strategies

Strategies The worst case

X1 9
X2 34
X3 37
X4 41

3- Decision / optimal decision Choose strategy X1

4- Decisions in case of difference (games theory):

The characteristic of this type of decision is that the course faces one or more
intelligent competitors in the market and at first glance it may appear to us that
this type of decision is contrary to our classification, which depends on the
knowledge of the course of the possibility of different situations of nature. But
the natural states of this kind of decision are, of course, competitors' strategies.
Many decisions are made in the case of competition where the return is not only
approved by one party but also depends on the decision of the other party.
The word match is called competition cases that have the following
characteristics:
1. There is a fixed number of contenders
2. Each competitor has a fixed number of plans (strategies)

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3. Each competitor must know all plans of the competitor but does not
know which plan the competitor will use
4. The return from each strategy should be known
5. Yield depends on competitors' plans
6. The return can be expressed in value

1- Two Person Games with Zero Sum

A game in which two of the contestants participate, where the profit of one
party is equal to the loss borne by the other party
Pure Strategy: When the two contenders use one plan each is called a pure
strategy
Mix Strategy: A strategy when the decision to use all or some of the strategies
available at fixed rates
The Value of the Game: The average value a competitor will receive in the long
run if both competitors use their best strategy
Gain Matrix: A table showing how much the rows player will get (the same as
the column player will pay)

Setting up the Gain (profits) Matrix

Columns player B

t u v w
Raw Player A

x a b c D

y e f g H

z k l m N

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When player A rows select strategy (Z) and player selects strategic columns (T),
the symbol (K) resulting from the intersection of the two strategies represents
how much player (B) pays to player (A) and when he wants to reverse the
matrix so that (B) is Player rows and (A) is a column player in which case the
rows become columns and columns rows with the opposite of the reference.
When Rows Player (A) randomly uses strategies Z, Y, X and Z: Y: X, and when
Columns B uses strategies W, V,B U, T and W: V: U: T, then rows player
strategies are written A (x, y, z) and column player strategies B (t, u, v, w).

Balance point
Assume that the profit matrix for a match is what:

1 2 3 Max min

3 -1 2 -1
1

A 2
-4 -1 13 -4
3
2 -2 -1
-2

Min max 3 -1 13

Base: Player A tries to maximize the value of the game (that is, trying to get as
much value as possible) while B tries to minimize the value of the game (that is,
he tries to lose as little as possible).

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To extract the equilibrium point, follow these steps:

1. Adding another row to the matrix is the minimum min row and adding
another column is the maximum min column ie at the end of each row fix
the lowest number in each row (-1, -4, -2) and at the end of each Column
Prove the largest number in each column (3, -1,13).
2. Circle the largest number in the row numbers and circle the smallest
number in the column numbers.
3. If the figures in step 2 equal in value, this value is the result of the game,
a balance point and indicate the use of both players pure strategy. The
value of the match = -1 is equal to the value of the equilibrium point The
ratios for using strategies are B (0,1,0), A (1,0,0)
4. If the numbers are not equal in step 2, this indicates that there is no
equilibrium point and the value of the game is equal to a number between
these two numbers as well as indicates that the players will mix all or
some of the strategies available to each.

Dominance rule
Assume that the matrix for a match is as follows:
B
1 2 3 4 Max min

1 2 2 3 4 2
A
2 4 3 2 2 2

Min max 4 3 3 4

So there is no Balance point the value of the match is a number between (+ 3,

+2) so we apply the Dominance rule.
1. Delete the column whose elements are larger or equal to the corresponding
elements in any other column (columns = <).

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2. Delete the row whose elements are less or equal to the corresponding
elements in any other row (rows =>).

The matrix thus reads as follows:

B
2 3

1 2 3
A
2 3 2

For the solution we use the following solution methods

Special methods in zero sum games:

1- Two by Two Games:
Example:
B
1 2

1 a1 a2 / b1-b2 /
A
2 b1 b2 / a1 – a2 /

/ a2- b2 / / a1 – b1 /
Answer:
In the event that the game is calculated from the point of view of A

a1 / b1  b2 /  b1 / a1  a 2 /
( B plays B1 ) V 
/ b1  b2 /  / a1  a 2 /
a2 / b1  b2 /  b2 / a1  a2 /
( B plays B2 ) V 
/ b1  b2 /  / a1  a2 /

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If the game is calculated from the point of view of B

a1 / a2  b2 /  a2 / a1  b1 /
( A plays A1 ) V 
/ a2  b2 /  / a1  b1 /
b1 / a2  b2 /  b2 / a1  b1 /
( A plays A2 ) V 
/ a2  b2 /  / a1  b1 /
Note:
The value of V is equal in the four cases if the sum of the numbers (resulting
from the subtraction) is vertical equal to the sum of the numbers horizontally,
but in cases where the sum is horizontal is not equal to the sum vertically, the
value of V is calculated in other ways that will be discussed later.

2- Two *N Or N* Two Games:

In this case, after making sure there is no equilibrium point, the matrix is
divided into 2 * 2 sub-matrices and solved by the previous methods. The
solution can be illustrated by the following example.

Example : Find the following game value

B
1 2 3 Max min

1 -6 4 -1 -6
A
2 7 -5 -2 -5

Min max 7 4 -1

There is no balance point and the match value is between -5 to -1

So we use the hash method to find the solution

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 The first attempt to neglect strategy B3 becomes the matrix

B
1 2

1 -6 4 / b1-b2 / 12
A
2 7 -5 / a1 – a2 / 10

/ a2- b2 / / a1 – b1 /

9 13
 6 *12  7 * 10  2
The Value of the Game V 
12  10 22

A  12 , 10  , B  9 13 
 , 
 22 22   22 22 

 Now we try to test this solution by comparing it with the neglected

strategy as follows:

 1*12  (2 *10)  16

The Value of A against B3 V 
12  10 22
This score means that B can improve their position by using B3

 The second attempt to neglect the B2 strategy

B
1 3

1 -6 -1 / b1-b2 / 9
A
2 7 -2 / a1 – a2 / 5

/ a2- b2 / / a1 – b1 /

1 13

There is no balance point

 6 * 9  7 * 5  19
The Value of the Game V 
95 14
A 
9 5   1 13 
, , B  , 
 14 14   14 14 

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 Now we are testing the solution with the neglected B2 strategy

4 *9  (2 * 5) 11
The Value of A against B2 V 
95 14
This is a 3 * 2 game in which B on average can earn A from 19/14 using his
best strategy, while B loses 11/14 if he uses B2 strategy.

The Full Solution is A 

9 5   1 13 
, , B  ,0, 
 14 14   14 14 
 19
The Value of A =
14

Solution in the graphical way:

Example: Find the game value using the graphical method.

B
1 2
1 -6 7
A 2 0 -3
3 6 -8
4
-3/2 2

Note:
If the match type is N * 2, the solution is at the top of the drawing.
If the match type is 2 * N the solution is at the bottom of the drawing.

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B1 X2 X1
B2

N*2
A1

A4
2
‫خط الصفر‬
A2

8
A3

2*N

2 1 8 4
= =
2+8 5 2+8 5

The point of intersection of strategies with the zero line is the best solution (or
we choose a point closer to the zero line). Authorized intersection A3 with A4 is
the perfect solution

The percentage of using Strategy A is

A3+A4=14+3.5=17.5
A3=3.5/17.5=1/5
A4=14/17.5=4/5
A1=A2=0.0 ( ‫)النها ال تمر بالحل‬

A ( 0 , 0, 1/5 ,4/5 )

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To find the percentage of using Strategy B, draw a straight line equal to B1 and
B2
X X
B1  1 , B2  2
X X

If we assume that (x = 7), it is the measurement to find that (x1 = 3) and (x2 =
4) this leads to

B1=4/7
B2=3/7

Full solution

V=0.0
A ( 0 , 0, 1/5 ,4/5 )
B (4/7 ,3/7 )

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