Game theory is a study of situations of strategic interaction between two or more players in which there is a predefined set of rules and an outcome associated with each choice taken.
Game theory is a study of the strategic interaction between two or more players in a situation containing set rules and outcomes. While used in a number of disciplines, game theory is most notably used as a tool within the study of economics. Most research in game theory focuses on how groups of people interact.
There are number of sub-branches in game theory, focusing of different types of games:
- Noncooperative / Cooperative / Hybrid
- Zero-sum / Non-zero-sum
- Perfect information / Imperfect information
- Complete Information / Incomplete Information
- Symmetric / Asymmetric
- Static Games / Multistage Games
Other branches of economics, closely connected to game theory:
- Decision theory can be viewed as a theory of one person games, or a game of a single player against nature.
- General equilibrium theory can be viewed as a specialized branch of game theory that deals with trade and production, and typically with a relatively large number of individual consumers and producers
- Mechanism design theory differs from game theory in that game theory takes the rules of the game as given, while mechanism design theory asks about the consequences of different types of rules.