What
is
Game
Theory?
In
neoclassical
economics:
consumers
and
firms
are
price-takers:
—
Everyone
makes
individual
decisions
based
on
some
publicly
known
prices
which
adjust
to
bring
the
economy
into
"equilibrium".
No
agent
cares
about
others'
decisions
directly
In
contrast,
Game
Theory
studies
strategic
interactions:
situations
involving
several
agents/decision-makers
in
which
actions
of
each
agent
affects
well-being
of
others.
