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GAME THEORY

Game theory is a branch of applied mathematics that studies the strategic interactions between different agents in decision-making situations. It is often applied in diverse fields such as economics, political science, biology, psychology, and computer science.Game theory involves the mathematical modeling of games, in which players may have different strategies available and their outcomes are influenced by the choices of other players. The objective is to analyze the players' strategic decisions, considering the possible rewards, risks and interactions between them.Some key concepts in game theory include:Players: They are the agents who participate in the game and make strategic decisions. Each player seeks to maximize his own utility or goal.Strategies: These are the options available to each player. Strategies can be simple or complex, depending on the game.Payoffs: These are the rewards or utilities that players receive based on the strategy combinations chosen by them and other players.Nash Equilibrium: It is a situation in which no player has an incentive to change his strategy, given the strategies chosen by the other players. In a Nash equilibrium, no one can improve their situation individually, given the behavior of the other players.Cooperative games vs. Non-Cooperative Games: In cooperative games, players can form coalitions and make deals to achieve joint outcomes. In non-cooperative games, players act individually, seeking to maximize their own utility.Game theory can help you understand a wide range of situations, from business negotiations and political competition to everyday social interactions. It provides an analytical framework for examining the consequences of strategic choices and can help identify the best courses of action in different contexts.