BASIC CONCEPTS OF GAME THEORY AND TYPES OF EQUILIBRIUM
Abstract
This article explores the role of game theory in economics, focusing on its application to strategic decision-making, competition, and resource allocation. Game theory, particularly in the context of non-cooperative and cooperative games, offers critical insights into the interactions between individuals and organizations in various economic settings. The theory's evolution, from von Neumann and Morgenstern's foundational work to John Nash's equilibrium concept, has significantly advanced the understanding of economic behavior.
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