Game theory is an interdisciplinary field of study that uses mathematical models to analyze and understand strategic decision-making in competitive situations. It's widely used in various domains, such as [economics](, [political science](, [psychology](, sociology, and even biology. In simpler terms, game theory helps us study how people or entities make decisions when their choices affect and are affected by the choices of others. In game theory, the term "game" doesn't necessarily refer to a recreational activity. Instead, it represents a situation where multiple players or decision-makers interact, and each player has a set of possible actions or strategies to choose from. The outcome of the game depends on the combination of strategies chosen by all the players. ## Key elements of a game 1. **Players**: The individuals or entities making decisions and interacting with each other. 2. **Strategies**: The possible actions or choices available to each player. 3. **Payoffs**: The outcomes or rewards associated with each possible combination of strategies chosen by the players. 4. **Information**: The knowledge players have about the game, including the strategies and payoffs of other players. ## Game theory main branches 1. **Cooperative game theory**: This branch focuses on situations where players can form binding agreements or coalitions to achieve a better outcome collectively. In these games, players analyze the best way to cooperate to maximize their joint payoff. 2. **Non-cooperative game theory**: This branch deals with situations where players cannot make binding agreements or where each player makes decisions independently. In these games, players try to anticipate the actions of others and choose strategies that maximize their individual payoffs. Some well-known concepts in game theory include the Nash equilibrium, prisoner's dilemma, and [[zero-sum]] games, among others. Game theory has been instrumental in understanding various phenomena, such as voting behavior, auctions, negotiation strategies, and even animal behavior.