What is Game Theory? Game Theory is a branch of applied mathematics that analyses strategic interactions between rational decision-makers, or "players," in situations called "games." These games model conflicts or cooperative scenarios where each player's outcome depends not only on their own choices but also on the choices of others. A "game" refers to any structured interaction where players make decisions to achieve specific objectives, often repeatedly, such as in negotiations, economic competition, or military conflicts. The goal of each player is to maximize their payoff (gains) while minimizing costs, considering the strategies available across multiple iterations of the game. Key Characteristics of Game Theory Game Theory evaluates strategies based on their mathematical effectiveness, focusing on outcomes like payoff matrices rather than moral, emotional, or ideological considerations. It assumes players are rational agents who aim to...
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