Game theory


 

Home
Site Map
Add Term
Search
About Us
Contributors

Game Theory

Game Theory is a theory of rational behavior of participants in interactive decision-making scenarios. It helps predict how other participants of the situation / scenario (game) will respond in certain situations, or to certain decisions. Understanding participants' responses ahead of a decision, should help the initial decision maker make better decisions. It is applicable in areas such as:open sourcedevelopment. Freerider issues forexample. Should you contribute resources when somone else may benefitwithout contribution?standardssetting. Should you cooperate with your competitors to help expand andstandardize the marketplace?dynamicpricing. Should you bid at a price point, and will that create a higherbid from someone else?competitor reactions to decisions. When making marketing decisions, youcannot only analyze how your customers may respond without considering howyour competitors will respond, as this will in turn impact your customers.A popular game theory model, for a non-zero sum situation, is the prisoners dilemma.

Game theory

The modeling of strategic interactions among agents, used in economic models where the numbers of interacting agents (firms, governments, etc.) is small enough that each has a perceptible influence on the others.



Similar Matches

Theory of second best

Theory of second best

See second best.


Expectations theory of forward exchange rates

Expectations theory of forward exchange rates

A theory of foreign exchange rates that states that the expected future spot foreign exchange rate t periods from now equals the current t-period forward exchange rate.


Preferred habitat theory

Preferred habitat theory

A biased expectations theory that believes the term structure reflects the expectation of the future path of interest rates as well as risk premium. The theory rejects the assertion that the risk premium must rise uniformly with maturity, but instead profits that to the extent that the demand for and supply of funds do not match for a given maturity range, some participants will shift to maturities showing the opposite imbalances, as long as they are compensated by an appropriate risk premium whose magnitude will reflect the extent of aversion to either price or reinvestment risk.


Trade theory

Trade theory

The body of economic thought that seeks to explain why and how countries engage in international trade and the welfare implication of that trade, encompassing especially the Ricardian Model, the Heckscher-Ohlin Model, and the New Trade Theory.


Complexity Theory

Complexity Theory

The theory that processes with a large number of seemingly independent agents can spontaneously organize themselves into a coherent system.


Further Suggestions

Bubble theory
Labor theory of value
Local expectations theory
capital market theory
Dow dividend theory
Dow theory
Odd lot theory
Product cycle theory
Normal backwardation theory
Bicycle Theory
Purchasing power parity theory
Portfolio theory
Greater fool theory
New Trade Theory
Modern portfolio theory
Agency theory
Efficient markets theory(EMT)
Presidential election cycle theory
Elliott Wave Theory
Dow Theory
Cushion theory
Short interest theory
efficient market theory
Conduit theory
Dependency Theory


 
All rights Reserved. Do not copy without permission. T4 Innovations Ltd