Game Theory

Game theory is the mathematical study of strategic decision making among rational agents whose outcomes depend on one another's choices, encompassing both cooperative and non-cooperative interactions. John von Neumann and Oskar Morgenstern's 1944 book Theory of Games and Economic Behavior established the field's formal foundations, and John Nash's subsequent work on equilibrium points, for which he shared the 1994 Nobel Memorial Prize in Economic Sciences, gave the field its central solution concept, the Nash equilibrium, describing a state in which no player can benefit by changing strategy alone. The theory has become a standard tool across economics, evolutionary biology, political science and computer science for modeling competition, cooperation and conflict.