Economists use game theory to analyze strategic behavior,which takes into account
A) monopoly situations.
B) the expected behavior of others and the recognition of mutual interdependence.
C) the price-taking behavior of oligopolists.
D) non-price competition.
E) that increased demand decreases the market power of the firms in the market.

Question

Quizplus · Accepted Answer

Game theory is used to analyze strategic behavior, which involves anticipating the behavior of others and recognizing mutual interdependence. This is particularly relevant in oligopoly situations, where firms have to make decisions based on how they expect their competitors to behave. The other options (A, C, D, and E) are not necessarily mutually exclusive with game theory, but they do not provide a comprehensive explanation of the use of game theory.

Economists Use Game Theory to Analyze Strategic Behavior,which Takes into Account