What is a Game? Game: a situation in which a number of individuals make decisions, and each cares both about his own choice and about others' choices.
Example game theory provides the foundation for understanding competition in industries with only a few producers. Example: every negotiation is a game. Two Types of Games.
One-stage game: each participant makes all of their choices before observing any choice by any other participant. Multiple-stage game: at least one participant observes a choice by another participant before making some decision. Describing a Game One-stage games 1) Identify the players and list the strategies available to each.
2) Identify each player's payoff for every possible combination of strategies