Game theory is the tool that economists use to analyze strategic behavior,which is behavior that takes into account the ________ behavior of others and the mutual recognition of ________.
A) unexpected; interdependence
B) unexpected; independence
C) expected; interdependence
D) expected; independence
E) random; profit

Question

Quizplus · Accepted Answer

Game theory deals with decision-making situations where each participant's choices depend on the choices and actions of others, creating interdependence between the players. The behavior of others is expected to be taken into account while making decisions. Therefore, option C is the correct answer. Option A and E are incorrect as they involve unexpected or random behavior, which is not necessarily captured by game theory. Option B is incorrect as independence implies that a player's choice does not depend on the actions of others, thus making game theory irrelevant. Option D is incorrect as it implies that the behavior of others is not taken into account, which is again not true for strategic decision-making situations.

Game Theory Is the Tool That Economists Use to Analyze