The study of how decisions are made when strategic interaction occurs between rivals is known as
A)Game theory.
B)Contestable market theory.
C)Market power theory.
D)Predatory pricing theory.

Question

Quizplus · Accepted Answer

The study of how decisions are made when strategic interaction occurs between rivals is specifically addressed by game theory. Contestable market theory focuses on the ease with which firms can enter or exit a market, market power theory studies the ability of firms to control prices and output, and predatory pricing theory examines the strategy of temporarily lowering prices to drive competitors out of business. None of these theories specifically address strategic interactions between rivals.

The Study of How Decisions Are Made When Strategic Interaction