Business, Legal & Accounting Glossary
Game theory is a mathematical approach that includes strategic decisions of market agents to predict the probable market situation. To explain in simple terms, game theory is a strategic attempt to study human behaviour, in which an individual’s decision to make choices is depended on choices of others.
Great mathematician John von Neumann is known to be the founder of game theory. Representation of games is a major element of game theory. Games are situations in which at least a single agent is allowed to maximize his utility through anticipating the responses of one or more agents. The agents are known as players. Each game includes strategies, where strategy is a predetermined situation according to which the player who maximizes profit makes his move.
The games of game theory are represented in varied order according to the strategies. The representation of games is a significant aspect of game theory.
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This glossary post was last updated: 29th March, 2020 | 1 Views.