Decision Making Scheme Using Prisoner’s Dilemma: Fraud detection in Financial Transaction
Financial institution are facing thoughtful challenges with loud rising number of credit card fraud occurrences across
the globe. Although fraud has been a leading problem since the beginning of time, its operations in this present-day consent with various classes of people due to the availability of internet. Consequently, the matter of security is primary motivation as people begin to select their credit cards. Due to this fact, banks and credit card companies are looking into updating their systems to include more advanced mechanisms that can both detect and prevent fraud. By using current machine learning innovative idea that is shrewd to identify patterns and connections between transactions, activities, and fraud occurrences, financial institutions can find a smarter and more effective ways to detect and prevent fraudulent transactions. With this benefit, banks and financial institutions can automate the analysis of their customers’ behavioral patterns for any signs of abnormality, giving them the ability to identify and flag fraudulent activity in real-time. Hence, the theory of rational choice becomes imperative in financial transaction decision making. Game theory represents a theoretical framework for conceiving social situations among competing players. It can also be described as science of strategy which make use of optimal decision-making scheme in independent and competing actors in a strategic setting. This classic Prisoner’s Dilemma is a situation where the prisoners were to make individual simultaneous choices that cannot be undo. The independence of their choices was also ensured by putting the prisoners in separate cells, there by excluding any possibility for communication relevant to the choices that they were going to make. In doing so an uncommon situation is being set up in such a way that make people interact in manners that permit them to respond to each other’s behavior or communicate about their choices. Prisoner’s dilemma is a modern game theory concepts used to represent a paradoxical decision analysis in which two individual acting in their own self-interest so not eventual produce the optimal outcome. A typical prisoner’s dilemma describes a set up in which both parties individually choose to prioritize their own protection at the expense of the other participant. This simply describe the need for each partaker to defend their life from the havoc of the situation at hand, and it solemnly depends on the choice of decision by the individual player.
Authors: Victor Funmipe Olofinlade, Boniface Kayode Alese, Adebayo Olusola Adetunmbi, Aderonke Favour-Bethy Thompson
- Date of Conference: 7-9 December 2021
- DOI: 10.20533/ICITST.2021.0007
- ISBN: 978-1-913572-39-6
- Conference Location: Virtual (London, UK)