Game Theory: Negotiations Or Showdowns

For most people, game theory lives in two corners of life: economics classrooms and video games. It’s a phrase that evokes images of Cold War negotiations or player-versus-player showdowns. And to their credit, that’s grounded.

At its core, game theory studies how people make decisions when outcomes hinge not just on their choices, but on others’ choices too. Originally a mathematical model developed to analyze strategic interactions, it’s now applied to everything from dating apps to corporate strategy.