Game theory is important in understanding
A) how perfectly competitive firms behave.
B) production decisions by firms.
C) consumer demand.
D) interdependence and choice.
E) the behaviour of a pure monopolist.

Question

Quizplus · Accepted Answer

Game theory is concerned with the analysis of interdependence and choice. It helps us understand the strategic behavior of individuals or firms in situations where the outcome depends not only on their own actions but also on the actions of others. Game theory is particularly useful in understanding situations of conflict or cooperation, such as in competition between firms, negotiations between individuals, or international relations.

Game Theory Is Important in Understanding