Introduction

Have you ever wondered why gas stations on the same corner charge similar prices? Or why countries engage in arms races even though both would be better off spending less on weapons? Or why you and your friends can’t decide where to eat, even though everyone wants to go somewhere? These situations all involve strategic decision-making—and that’s exactly what game theory studies. What is Game Theory? Game theory is the mathematical study of strategic interactions. It’s a framework for understanding situations where your best choice depends on what others choose, and their best choice depends on what you choose. ...