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Recent Examples of game theory from the Web

Such missteps derive from the fact that, in London, decisions over Brexit are motivated not primarily by expert advice, strategic considerations, game theory or negotiating tactics but by domestic politics.

Another motivator: his love of puzzles and game theory, which recently led him to become an escaperoom aficionado.

To Frigo, those mistakes confirmed coaches’ susceptibility to conservative thinking from a purely game theory standpoint.

My plan was akin to stealing the works of John Forbes Nash and trying to pass a course on game theory at Princeton.

Honda’s new Accord is a $30,000 masterclass in game theory.

This peacocking could suggest a kind of contracting game theory at work: The competition is so large, and the prompt simple enough to be outlined in one page, that standing out with a risky proposal is your best bet.

Quite early on, students have lessons in the weirdness in economics—from game theory to power dynamics within firms—that makes the subject fascinating and useful but are skimmed over in most introductory courses.

Complete high school math, including calculus, in middle school and devote high school to more complex subjects: multivariable calculus, abstract algebra, probability, game theory and other college subjects.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'game theory.' Views expressed in the examples do not represent the opinion of MerriamWebster or its editors. Send us feedback.
First Known Use of game theory
1945
Financial Definition of GAME THEORY
What It Is
Game theory is a tool used to analyze strategic behavior by taking into account how participants expect others to behave. Game theory is used to find the optimal outcome from a set of choices by analyzing the costs and benefits to each independent party as they compete with each other.
How It Works
Game theory explores the possible outcomes of a situation in which two or more competing parties look for the course of action that best benefits them. No variables are left to chance, so each possible outcome is derived from the combinations of simultaneous actions by each party.
Game theory is best exemplified by a classic hypothetical situation called the Prisoners' Dilemma. In this scenario, two people are arrested for stealing a car. They will each serve 2 years in prison for their crime.
The case is airtight, but the police have reason to suspect that the two prisoners are also responsible for a recent string of highprofile bank robberies. Each prisoner is placed in a separate cell. Each is told he is suspected of being a bank robber and questioned separately regarding the robberies. The prisoners cannot communicate with each other.
The prisoners are told that a) if they both confess to the robberies, they'll each serve 3 years for the robberies and the car theft, and b) if only one confesses to the robbery and the other does not, the one who confesses will be rewarded with a 1 year sentence while the other will be punished with a 10 year sentence.
In the game, the prisoners have only two possible actions: confess to the bank robbery, or deny having participated in the bank robbery.
Since there are two players, each with two different strategies, there are four outcomes that are possible:
The best option for both prisoners is to deny committing the robberies and face 2 years in prison for the car theft. But because neither can be guaranteed that the other won't confess, the most likely outcome is that both prisoners will hedge their bets and confess to the robberies  effectively taking the 10 year sentence off the table and replacing it with the 3 year sentence.
Why It Matters
Economists use game theory to understand the behavior of firms in an oligopoly (think OPEC and other cartels)  specifically in regards to price fixing, price wars, collusion, etc. Game theory gives economists a way to predict outcomes when firms engage in these kinds of behavior.
Learn More about game theory

Britannica.com: Encyclopedia article about game theory
Seen and Heard
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