What is game theory about?

Game theory means that in an equal game, two people use each other's strategies to change their confrontation strategies in order to win. Game theory mainly studies the interaction between formulaic incentive structures, which is a mathematical theory and method to study phenomena with the nature of struggle or competition.

Game theory has become one of the standard analytical tools of economics. Widely used in finance, securities, biology, economics, international relations, computer science, political science, military strategy and many other disciplines.

Game theory considers the individual's predictive behavior and actual behavior in the game, and studies their optimization strategies. Biologists use game theory to understand and predict some results of evolution.

Assumptions of game theory:

1, the decision-making subject is rational and maximizes its own interests.

2. Complete rationality means that * * * has knowledge.

3. Assume that each participant forms correct beliefs and expectations about the environment and the behavior of other participants.