GAME THEORY

Game theory is the formal study of conflict and cooperation. Game theoretic concepts apply whenever the actions of several agents are interdependent. These agents may be individuals, groups, firms, or any combination of these. The concepts of game theory provide a language to formulate, structure, analyze, and understand strategic scenarios. Many times in a scenario, one course of action seems very benefitting due to consideration from one angle but the other looks equally good. Game theory is the study of modeling these situations and then compares them in order to choose the most appropriate decision. Game theory is also about taking a rational course of action between rivals so that no rivals is harmed neither benefitted in certain situations. Game theory is also about altruism at times. It also constitutes topics like, prisoners dilemma, nash equilibrium etc. In short, Game theory is the formal study of decision-making where several players must make choices that potentially affect the interests of the other players.