One of the primary tools that economists use to study strategic choices is formal game theory. This subject was originally developed during the 1920s and grew rapidly during World War Ⅱ. Today the theory has applicability to problems as diverse as t...
One of the primary tools that economists use to study strategic choices is formal game theory. This subject was originally developed during the 1920s and grew rapidly during World War Ⅱ. Today the theory has applicability to problems as diverse as the development of optimal strategies for five card stud poker to the analysis of antimissile defenses.
Fundamentally, game theory modeling seeks to portray complex strategic situations in a highly simplified and stylized setting. Much like other models in the social sciences, game theory models abstract from most of the personal and institutional details of a problem in order to arrive at a representation of the situation that is mathematically tractable.
The tools of game theory have relevance to many kinds of choices of strategy in uncertain situations. In this paper, some of the concepts associated with the modern theory of games are mentioned. Expecially, some examples of differential games are briefly introduced in a little bit rigorous way.