Game Theory

Game theory uses mathematics to model the interaction between two or more parties when they make decisions that will affect their outcomes. It sets up rules that determine the available information, the various payoffs, and each player’s possible moves. The actions are strategic in the sense that the actions of all parties are not fixed. The players have to make their best assessment of what to do in the face of actions by the other party and other variables to achieve an optimal outcome. Game theory has been used extensively in fields such as economics, business, politics, social sciences, psychology, military planning, and, more recently, biology.

Game theory originated shortly after the Second World War from work done by mathematicians John von Neumann and Oskar Morgenstern ...