1.

What do you think is/are the importance of understanding the Game Theory by

the economist/managers? How does they benefit in understanding this economic

typology?

According to Investopedia, Game theory is a theoretical framework to conceive

social situations among competing players and produce optimal decision making of

independent and competing actors in a strategic setting. Using game theory, real-world

scenarios for such situations as pricing competition and product releases can be laid out

and can be predicted their outcomes. The Game theory is used to help determine the

most likely outcomes from the decision made.

2. Click the links on (1) Game Theory (2) Game Theory. List down and discuss your

observation on the Concept of Nash equilibrium and Prisoner’s Dilemma on this

video. Select one answer from question no. 2 and apply the concept you have

learned on this video.

The Nash Equilibrium is a decision-making theorem within game theory that

states a player can achieve the desired outcome by not deviating from their initial

strategy while, the prisoner's dilemma is a paradox in decision analysis in which two

individuals acting in their own self-interests do not produce the optimal outcome. The

reason why Nash equilibrium is considered as an important concept of game theory

relates to its applicability.