Quick Definition

Game theory is a branch of mathematics that analyzes strategic interactions where the outcome for each participant depends on the actions of others.

Examples

• 1In investing, traders use game theory to predict how other traders will react to news or market changes.
• 2In corporate negotiations, companies use game theory to determine the best strategies when negotiating mergers or partnerships.
• 3In auctions, bidders use game theory to decide how much to bid based on what they believe others will bid.
• 4In marketing, firms apply game theory to anticipate competitor responses to new product launches or price changes.

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