Game Theory
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First published Sat Jan 25, 1997; substantive revision Wed May 5, 2010 Game theory is the study of the ways in which strategic interactions among economic agents produce outcomes with respect to the preferences (or utilities ) of those agents, where the outcomes in question might have been intended by none of the agents. The meaning of this statement will not be clear to the non-expert until each of the italicized words and phrases has been explained and featured in some examples. Doing this will be the main business of this article.
Game theory is a study of strategic decision making . More formally, it is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers." [ 1 ] An alternative term suggested "as a more descriptive name for the discipline" is interactive decision theory . [ 2 ] Game theory is mainly used in economics, political science, and psychology, as well as logic and biology. The subject first addressed zero-sum games , such that one person's gains exactly equal net losses of the other participant(s). Today, however, game theory applies to a wide range of class relations, and has developed into an umbrella term for the logical side of science, to include both human and non-humans, like computers.
