Game Theory

Game theory is a model of decision making and strategy under differing conditions of uncertainty. Games are defined as strategic interactions between players, where strategy refers to a complete plan of action including all prospective play options as well as the player's associated outcome preferences. The formal predicted strategy for solving a game is referred to as a solution. The purpose of game theory is to explore differing solutions (i.e., tactics) among players within games of strategy that obtain a maximum of utility. In game theory parlance, “utility” refers to preferred outcomes that may vary among individual players. John von Neumann and Oskar Morgenstern seeded game theory as an economic explanatory construct for all endeavors of the individual to achieve maximum utility or, in economic ...