Game Theory: Understanding Your Decision Context
What is game theory? What economists call game theory; psychologists call "the theory of social situations". Game Theory predicts how intelligent individuals, or intelligent groups, interact with one another in an effort to best achieve their own goals and objectives, where no one party controls the outcome.
Predicting the Natural Outcome
In any situation where multiple parties are seeking to maximize their own benefits, there is a natural outcome - an inevitable sequence of events that will play out over time. In the end, some parties will gain advantage and others will suffer the consequences.
Achieving Your Optimal Outcome
This is where game theory gives decision makers an edge. Faced with a complex strategic decision - one that involves a variety of risky alternatives to choose from and a number of influential players - game theory can be used proactively for:
