Game Theory

Randall Calvert

Game theory is the study of rational behavior in situations of interactive decision making—that is, situations in which two or more individuals make decisions that jointly determine an outcome about which the participants have differing preferences or information. As a theory, it aims to articulate the criteria and implications of such decision making, defining principles of idealized strategic choice. These principles can then be used to clarify explanatory and normative concepts of human interaction. An experimental branch examines the extent to which real decision makers in a laboratory setting realize those principles and identifies regular patterns of departure from them. As an empirical tool, game theoretic models of social phenomena yield empirical predictions suitable for testing with observational data. Originally applied to economics, game theory has found application across the social sciences, as well as in biology (where in effect the “selfish gene” and natural selection replace individual strategic decision ...

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