Write a paper that uses game theory to to set up a game designed to help a consu

Question

Write a paper that uses game theory to to set up a game designed to help a consumer decide whether to buy life insurance or not. To keep the game relatively simple, assume the life insurance being considered is term life, i.e. insurance without an accumulating investment value. Keep in mind that your paper is going to be read by people without prior knowledge of game theory. Remember to cite any outside references used. Hint: The most common set-up for this game is to have a potential insurance buyer playing against 'Mother Nature'.

Explanation / Answer

Game theory is nothing but a theory which is developed to show zero sum games, In this the participants get benefit from other players loosing the game.

If a customer buys insurance againist natural disasters this is precise example of game theory, The insurance company calculates risk and gives a premium, other people in the insurance also insured againist different types of problems like vehicles etc,

Here there is a major earth quake and destroy all buildings in the area, Now our customer who have singed up for insurance againist mother nature has won, Others have lost.

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