Game theory is
A)The study of price-fixing and collusion.
B)The study of decision making in situations where strategic interaction occurs between rivals.
C)An explanation of how oligopolists become monopolists.
D)Practiced by perfectly competitive firms.

Question

Quizplus · Accepted Answer

Game theory is the study of decision making in situations where strategic interaction occurs between rivals, such as oligopolists. It helps us understand the behavior of firms in situations where they must consider the actions of their competitors in making decisions. It is not limited to price-fixing and collusion, nor is it an explanation of how oligopolists become monopolists. Perfectly competitive firms do not need to practice game theory, as their actions do not depend on the actions of other firms.

Game Theory Is