Please I need help with this question Thanks What is Game Th

Please I need help with this question, Thanks.

What is Game Theory (definition)? How does Game Theory apply to an Oligopoly Market?

Solution

ANSWER:

Game theory can be defined as study of mathematical models of conflict, negotiation, and cooperation among intelligent rational decision-makers such as individuals, organizations and governments. Game theory mathematically capture behavior in strategic circumstances, in which an individual’s success in making choices depends on the others choices with a motive to use the best strategy to achieve desired results. Game theory model has direct relevance to the study of the behaviour and conduct of firms in oligopolistic markets. The firms are interdependent in an oligopoly market thus their decisions are affected not only by their own decisions such as how much to produce, however by the decisions of other firms in the market also.