Game theory may be used to solve problems of interdependent decision making by large firms.

Question

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Game theory provides a framework for analyzing the decisions made by players who are aware that their actions affect each other. In the case of large firms, decision making is often interdependent as each firm’s actions can have an impact on the market and its competitors. Game theory can be used to analyze such situations and provide insights into the best strategies for each firm to maximize its profits.

Game Theory May Be Used to Solve Problems of Interdependent