Mathematics

Game theory provides a framework for analysing strategic decision-making under uncertainty, making it a valuable concept for risk professionals. John von Neumann, along with Oskar Morgenstern, introduced foundational concepts in their book Theory of Games and Economic Behavior, establishing game theory’s central role in economic and strategic analysis. The minimax theorem, developed by von Neumann, became a cornerstone of game theory, defining optimal strategies in competitive scenarios. Game theory models how competitors anticipate each other’s moves, offering tools to analyse strategic interactions — a crucial skill for managing risk in competitive or adversarial environments such as cybersecurity, financial markets, and supply chain management. ...

The Minimax theorem, a key concept in game theory, offers valuable insights for risk and cybersecurity professionals. Originally developed for zero-sum games with perfect information, it also applies to scenarios with imperfect information. The theorem states that in zero-sum games (where one player’s gain is exactly balanced by the other’s loss), each player can choose a strategy to minimise their maximum possible loss — known as the minimax strategy. This approach limits worst-case losses, even against an optimal adversary. While cybersecurity scenarios aren’t always perfectly zero-sum, the analogy is useful because a defender’s loss (a successful attack) is often the attacker’s gain. ...