Economists use ________ theory to better understand what might happen in situations where strategic interactions are involved.
A) complexity
B) strategic
C) competitive
D) noncompetitive
E) game

Question

Quizplus · Accepted Answer

Economists use game theory to analyze situations where there are strategic interactions, such as in markets, negotiations, and conflicts. Game theory provides a framework for understanding the behavior and decision-making of individuals or firms who are interdependent, that is, their actions affect each other's payoffs. By modeling the incentives, strategies, and outcomes of different scenarios, game theory can predict what might happen and how different players might behave in different situations. Game theory has many applications in economics, business, politics, and social sciences.

Economists Use ________ Theory to Better Understand What Might Happen