What's game theory in your understanding??

Game theory is about using math to analyze decision making.

"Games" in this sense are simply situations where one or more agents make decisions,
and either benefit or are hurt based on the outcome of the decision. One classic game is
the prisoner's dilemma, in which the two agents are prisoners, but agents can be
anything that makes decisions and then benefits to a varying degree based off its
choices (for example, companies can be agents in addition to people).

Game theory also applies to more everyday situations. For example, you can think about
the decision of how hard to work on your homework. Your payoff in this case is a
combination of the benefit you gain from your grade on the homework, and the loss
incurred by the time/effort spent on completing it. The agents are your classmates and
the teacher, and your optimal strategy will depend on how tough of a grader you think
the teacher is, and how hard working your classmates are.

If you were to formalize the above problem by formally describing how each person is
believed to act with numbers and equations, game theory can tell you what the optimal
strategy is, or what is expected to happen when following a given strategy. In your
everyday life, you probably solve an approximation of this problem without the
formalization.