game theory
/ˈɡeɪm ˌθɪəri/
the study of mathematical models of strategic interaction
game theory in a sentence
“Game theory explains why competitors often end up in suboptimal equilibria.”
Origin of game theory
From game + theory, formalized by John von Neumann and Oskar Morgenstern (1944)
Related Words
Nash equilibrium
a state where no player benefits by unilaterally changing strategy
payoff
the reward or outcome a player receives from a strategy
dominant strategy
a strategy that yields the best outcome regardless of opponents' choices
zero-sum game
a situation where one player's gain equals another's loss
positive-sum game
a situation where all players can benefit simultaneously
prisoner's dilemma
a game where rational self-interest leads to worse collective outcomes