game theory
game theoryA development in rational choice theory that is concerned with the rational behaviour of two or more people in circumstances where their interests are, at least in part, conflicting. In The Theory of Games and Economic Behaviour (1947), John Von Neumann and Oskar Morgenstern attempted to develop a theory covering both zero-sum games and non-zero-sum games. In this context a ‘game’ is any social situation where interaction occurs between at least two ‘players’ who are competing with each other at least some of the time. Such situations might include marriage, war, rivalry between political parties, the labour-market, and more specifically employer–worker negotiations. The key contribution of game theory is to provide an abstract mathematical theory to model what choices are possible, or likely, in situations with certain common features (such as the number of participants,...
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