ECON 1000 Chapter Notes - Chapter 15: Trigger Strategy, Oskar Morgenstern, Nash Equilibrium
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ECON 1000 Full Course Notes
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Economists think about oligopoly as a game between two or a few players, and to study oligopoly markets they use game theory. Game theory is a set of tools for studying strategic behaviour behaviour that takes into account the expected behaviour of others and the recognition of mutual interdependence. Game theory was invented by john von neumann in 1937 and extended by von neumann and oskar. Today, it is one of the major research elds in economics. Game theory: tool for studying strategic behaviour behaviour that takes into account the expected behaviour of others and the recognition of mutual interdependence. Strategies in game theory, strategies are all the possible actions of each player. Art and bob each have two possible actions: Payo matrix: table that shows the payo s for every possible action by each player for every possible action by each player for every possible action by each player for every possible action by each other player.
