Game theory is a method of studying decision-making situations in which the choices of two or more individuals or groups influence one another. Game theorists refer to these situations as games and to the decision makers as players. An example of such a situation is one in which the decision of each of several countries about whether to acquire nuclear weapons is affected by the decisions of the other countries. Game theory has become important in such fields as economics, international relations, moral philosophy, political science, social psychology, and sociology. Its roots are generally traced back to the book The Theory of Games and Economic Behavior (1944), by Hungarian-born mathematician John von Neumann and Austrian economist Oskar Morgenstern.
Game theorists have identified many types of games. In zero-sum games, the players have opposite interests. In nonzero-sum games, also called mixed-motive games, they have some interests in common. When the players can agree on a plan of action, they are in a cooperative game. In a noncooperative game, the players cannot coordinate their choices. Coordination may be impossible if the players cannot communicate, if no institution exists to enforce an agreement, or if coordination is forbidden by law, as in the case of antitrust laws.
Game theory's most famous game is called Prisoner's Dilemma, a noncooperative game that involves the following imaginary situation: The police arrest two suspects and keep them isolated from each other. Each prisoner is told that if only one of them confesses, the one who confesses will go free but the one who remains silent will receive a severe sentence. They are also told that if they both confess, each will receive a moderate sentence, and if neither confesses, each will receive an even milder sentence. Under these conditions, each prisoner is better off confessing no matter what the other one does. Yet by pursuing their own advantage and confessing, both get harsher sentences than they would have received if they had trusted each other and kept quiet.
Prisoner's Dilemma highlights and summarizes a conflict between individual and group interests that lies at the heart of many important real-life situations. For example, when farmers maximize their production, prices fall and all the farmers suffer. Collectively, the farmers would be better off restricting the amount they plant. Nonetheless, it is to each farmer's individual advantage to plant as much as possible. Decisions about paying taxes, protecting the environment, or acquiring nuclear weapons may also reflect this tension between what is good for the decision maker and what is good for the group.
DEFLATION
Deflation is a decline in the general level of prices in an economy. It is the opposite of inflation, in which prices rise. Deflation is rarer than inflation, but its consequences can be more severe.
Each year, about 5 percent of all countries experience deflation. Most of them are less developed nations, and the deflation they experience is brief. However, many industrialized countries, including the United States, the United Kingdom, Japan, Australia, and Canada, have experienced periods of deflation.
Deflation sometimes occurs when an economy undergoes a depression or a recession. During depressions and recessions, the total output of an economy declines. Depressions are more severe than recessions. The United States experienced sharp deflation during the Great Depression of the 1930's.
Deflation can be caused by competition among producers of goods and services to increase sales by reducing their prices. But weak demand for goods and services is the chief cause of almost all periods of deflation. In the United States during the Great Depression, several forces acted simultaneously to reduce demand. Banks had little money to lend to qualified individuals and businesses. The Federal Reserve System, the nation's central bank, failed to stimulate the economy by increasing the amount of money in circulation. Also, the federal government sought a balanced budget, which prevented it from cutting taxes or increasing its own spending. All of these factors contributed to a decline in demand and thus to deflation.
PETROLIUM
Petroleum is one of the most valuable natural resources in the world. Some people call petroleum black gold, but it may be better described as the lifeblood of industrialized countries. Fuels made from petroleum provide power for automobiles, airplanes, factories, farm equipment, trucks, trains, and ships. Petroleum fuels also generate heat and electricity for many houses and business places. Altogether, petroleum provides nearly half the energy used in the world.
In addition to fuels, thousands of other products are made from petroleum. These products range from paving materials to drip-dry fabrics and from engine grease to cosmetics. Petroleum is used to make such items in the home as aspirins, carpets, curtains, detergents, phonograph records, plastic toys, and toothpaste.
Although we use a huge variety of products made from petroleum, few people ever see the substance itself. Most of it comes from deep within the earth as a liquid called crude oil. Different types of crude oil vary in thickness and color, ranging from a thin, clear oil to a thick, tarlike substance. Petroleum is also found in solid form in certain rocks and sands.
The word petroleum comes from two Latin words meaning rock and oil. People gave it this name because they first found it seeping up from the earth through cracks in surface rocks. Today, petroleum is often referred to simply as oil, and most of it is found in rocks beneath the earth's surface.
People have used petroleum for thousands of years. But few people recognized its full value until the 1800's, when the kerosene lamp and the automobile were invented. These inventions created an enormous demand for two petroleum fuels, kerosene and gasoline. Since about 1900, scientists have steadily increased the variety and improved the quality of petroleum products.
Petroleum, like other minerals, cannot be replaced after it has been used. People are using more and more petroleum each year, and the world's supply is rapidly running out. If present rates of consumption continue, petroleum may become scarce sometime in the mid-2000's.
Most industrialized nations depend heavily on imported petroleum to meet their energy needs. As a result of this dependence, oil-exporting countries have been able to use petroleum as a political and economic weapon by restricting exports to some of these nations. Oil exporters have also strained the economies of a large number of countries, particularly the poorer ones, by drastically increasing the price of petroleum.
To prevent a full-scale energy shortage, scientists are experimenting with artificial forms of oil and with other sources of fuel. But even if new energy sources appear quickly, people will have to rely on petroleum for many years. Conservation of oil has thus become urgent for every country. People now need to be just as inventive in finding ways to conserve petroleum as they have been in finding ways to use it.
ASTRONOMY
Astronomy is the study of the universe and the objects in it. Astronomers observe the sky with telescopes that gather not only visible light but also invisible forms of energy, such as radio waves. They investigate nearby bodies, such as the sun, planets, and comets, as well as distant galaxies and other faraway objects. They also study the structure of space and the past and future of the universe.
Astronomers seek answers to such questions as: How did the universe begin? What processes release energy deep inside stars? How does one star "steal" matter from another? How do storms as big as Earth arise on Jupiter and last for hundreds of years?
To answer such questions, astronomers must study several subjects besides astronomy. Almost all astronomers are also astrophysicists because the use of physics is essential to most branches of astronomy. For example, some parts of cosmology, the study of the structure of the universe, require an understanding of the physics of elementary particles, such as the bits of matter called quarks that make up protons and neutrons. Astronomers use chemistry to analyze the dusty, gaseous matter between the stars. Specialists in the structure of planets use geology.
Astronomy is an ancient science. Like today's researchers, ancient scholars based their ideas of the universe on what they observed and measured and on their understanding of why objects move as they do. However, the ancients developed some incorrect ideas about the relationships between Earth and the objects they saw in the heavens. One reason for their errors was that they did not understand the laws of motion. For example, they did not know that a force--which we know as gravitation--controls the movements of the planets. Another reason was that their measurements did not reveal the movements of the planets in sufficient detail.
The ancients noted that the positions of the sun, moon, and planets change from night to night. We know that these movements are a result of the revolution of the moon about Earth and the revolution of Earth and the other planets about the sun. The ancients, however, concluded that the sun, moon, and planets orbit a motionless Earth. In many places, religious teachings supported this conclusion until the 1600's.
Although ancient people misinterpreted much of what they saw in the heavens, they put their knowledge of astronomy to practical use. Farmers in Egypt planted their crops each year when certain stars first became visible before dawn. Many civilizations used the stars as navigational aids. For example, the Polynesians used the positions of the stars to guide them as they sailed from island to island over thousands of miles or kilometers of the Pacific Ocean.
ISRAEL
Israel is a small country in southwestern Asia. It occupies a narrow strip of land on the eastern shore of the Mediterranean Sea. Israel was founded in 1948 as a homeland for Jews from all parts of the world, and more than 4 out of 5 of its people are Jews. Even Jews who live elsewhere consider Israel their spiritual home. Almost all the non-Jews in Israel are Arabs. Jerusalem is Israel's capital and largest city.
Israel makes up most of the Biblical Holy Land, the place where the religious and national identity of the Jews developed. According to the Bible, Abraham, the father of the Jewish people, established a Semitic population in the Holy Land. Many scholars believe this happened sometime between 1800 and 1500 B.C.
Eventually this land fell to a series of conquerors, including—in 63 B.C.--the Romans. Following unsuccessful Jewish revolts against Roman rule in A.D. 66-70 and A.D. 132-135, the Romans forced most of the Jews to leave. The Romans then began to call this region by the word that became Palestine in English. Palestine was ruled by the Roman and then the Byzantine empires until the A.D. 600's, when Arabs conquered the region. From that time until the mid-1900's, the majority of people in Palestine were Arabs.
In the late 1800's, European Jews formed a movement called Zionism, which sought to establish a Jewish state in Palestine. Jewish immigrants began arriving in Palestine in large numbers, and by the early 1900's friction had developed between the Jewish and Arab populations. In 1947, the United Nations (UN) proposed dividing the region into an Arab state and a Jewish state.
On May 14, 1948, the nation of Israel officially came into being. The surrounding Arab nations immediately attacked the new state, in the first of several Arab-Israeli wars. In 1967, at the end of one of the wars, Israeli troops occupied the Gaza Strip and the West Bank--territories that are home to more than 1 million Palestinian Arabs. Israel's occupation of these territories further inflamed Arab-Israeli tensions. In 1994, Israeli troops withdrew from the Gaza Strip, and by 1996, they had withdrawn from most cities and towns of the West Bank. The withdrawals were part of 1993 and 1995 agreements with the Palestine Liberation Organization (PLO), which represents Palestinian Arabs. For more details, see the Recent developments section of this article.
Israel has few natural resources and imports more goods than it exports. Still, it has achieved a relatively high standard of living. Almost all of its adults can read and write, and the level of unemployment is low. Jewish settlers have established major industries, drained swamps, and irrigated deserts.
Although it is a small country, Israel has a diverse terrain that includes mountains, deserts, seashores, and valleys. Israel has a pleasant climate, with hot, dry summers, and cool, mild winters.