Game Theory

Game theory is a branch of mathematics concerned with the analysis of conflict situations. It involves determining a strategy for a given situation and the costs or benefits realized by using the strategy. First developed in the early twentieth century, it was originally applied to parlor games such as bridge, chess, and poker. Now, game theory is applied to a wide range of subjects such as economics, behavioral sciences, sociology, military science, and political science.

The notion of game theory was first suggested by mathematician John von Neumann in 1928. The theory received little attention until 1944 when Neumann and economist Oskar Morgenstern wrote the classic treatise Theory of Games and Economic Behavior. Since then, many economists and operational research scientists have expanded and applied the theory.