Game theory is
A) The study of price-fixing and collusion.
B) The study of how decisions are made when interdependence exists between firms.
C) An explanation of how oligopolists become monopolists.
D) Practiced by perfectly competitive firms.

Question

Quizplus · Accepted Answer

Game theory is specifically concerned with understanding how decision-making works when the actions of one player affect the outcomes of other players. This is particularly relevant in the study of interdependent firms in markets such as oligopolies where firms need to take into account the actions of their competitors. Therefore, option B is the correct choice.

Game Theory Is