game theory
game theoryThe modelling of economic decisions by games whose outcome depends on the decisions taken by two or more agents, each having to make decisions without information on what choices the others are making. Game theory distinguishes between one-off games and repeated games, where reputation established through earlier games affects the conduct of subsequent ones. It also distinguishes between zero-sum games, where the game affects only the distribution of a given total of resources, positive-sum games, where some players can gain more than others lose, and negative-sum games, such as fighting over resources, where the game itself can decrease the amount available to be shared. Game theory is widely used in analysing both industrial organization and economic policy.
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