What is the point to game theory?

User Generated

zzbhfr18

Economics

Description

What is the point to Game Theory and why do we include it in the concept in a class on Microeconomics ?

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Thank you for the opportunity to help you with your question!

Game theory is the process of modelling the strategic interaction between two or more player in a situation containing set rules and outcomes.In a game theory we need at least two players and the potential outcome from the two players .Here the players are the strategic decision makers and there is also an assumption of maximization.It is also assumed that the players will strive to maximize the payoff(outcome).It would ultimately aide in the fundamental analysis of industries,sectors and any strategic interaction between two or more firms.

As here the individual point of view is taken in the decision making process(players)therefore it is included in microeconomics.

--Thanks----

Please let me know if you need any clarification. I'm always happy to answer your questions.


Anonymous
Goes above and beyond expectations!

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags