Game theory is an especially useful model for analysis in the following types of markets:

Question

Quizplus · Accepted Answer

Game theory is especially useful in analyzing markets characterized by interdependence, such as oligopolies, where firms must consider how their actions will impact the decisions and outcomes of their competitors. In perfect competition, there is no room for strategic decision-making as all firms are price-takers. In monopolistic competition, firms might consider the behavior of their competitors to some extent, but they have more autonomy in setting prices and differentiating their products. In a monopoly, there is only one firm in the market, so there are no competitors to consider. Therefore, C) oligopoly is the best choice.

Game Theory Is an Especially Useful Model for Analysis in the Following