Game Theory

Game theory is a mathematical system of reasoning referring to cases in which two or more individuals, with decision-making capacity and a set of preferences associated with the possible results, participate in a game wherein actions by each of the participants affect the decisions of the others and whose result is dependent on the totality of strategies adopted. Each game consists of a group of rules limiting the strategic possibilities of decision makers, a set of information that is accessible to players, and also a series of possible outcomes, or “payoffs.” Game theory is thus potentially an analytic tool concerning situations of cooperation or conflict based on strategic behaviors, particularly regarding the ways the parts interact and decide. This entry details the theoretical foundation of ...