game theory

game theory


Definition of GAME THEORY

:  the analysis of a situation involving conflicting interests (as in business or military strategy) in terms of gains and losses among opposing players
game theorist noun

First Known Use of GAME THEORY

circa 1947

game theory

noun    (Concise Encyclopedia)

Branch of applied mathematics devised to analyze certain situations in which there is an interplay between parties that may have similar, opposed, or mixed interests. Game theory was originally developed by John von Neumann and Oscar Morgenstern in their book The Theory of Games and Economic Behavior (1944). In a typical game, or competition with fixed rules, “players” try to outsmart one another by anticipating the others' decisions, or moves. A solution to a game prescribes the optimal strategy or strategies for each player and predicts the average, or expected, outcome. Until a highly contrived counterexample was devised in 1967, it was thought that every contest had at least one solution. See also decision theory; prisoner's dilemma.


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