Game theory is often described as a branch of applied mathematics
and economics that studies situations where multiple players make decisions in an attempt to maximize their returns. The essential
feature is that it provides a formal modelling approach to social situations in which decision makers interact with other
agents. Game theory extends the simpler optimisation approach developed in neoclassical economics.
The field of game theory came into being with the 1944 classic Theory
of Games and Economic Behavior by John von Neumann and Oskar Morgenstern. A major center for the development of game theory
was RAND Corporation where it helped to define nuclear strategies.
Game theory has played, and continues to play a large role in the
social sciences, and is now also used in many diverse academic fields. Beginning in the 1970s, game theory has been applied
to animal behaviour, including evolutionary theory. Many games, especially the prisoner's dilemma, are used to illustrate
ideas in political science and ethics. Game theory has recently drawn attention from computer scientists because of its use
in artificial intelligence and cybernetics.
In addition to its academic interest, game theory has received attention
in popular culture. A Nobel Prize–winning game theorist, John Nash, was the subject of the 1998 biography by Sylvia
Nasar and the 2001 film A Beautiful Mind. Game theory was also a theme in the 1983 film WarGames. Several game shows have
adopted game theoretic situations, including Friend or Foe? and to some extent Survivor. The character Jack Bristow on the
television show Alias is one of the few fictional game theorists in popular culture.[1]
Although some game theoretic analyses appear similar to decision
theory, game theory studies decisions made in an environment in which players interact. In other words, game theory studies
choice of optimal behavior when costs and benefits of each option depend upon the choices of other individuals.
