🧠Game theory is a mathematical theory that analyzes strategic interactions.
🤝Strategic interactions can be cooperative, rather than purely competitive.
📚Game theory was initially developed in economics but has applications in various fields.
🔢Game theory involves decision-making under uncertainty and over time.
💰Game theory can help find mutually beneficial solutions in seemingly zero-sum situations.
What is game theory?
—Game theory is a mathematical theory that analyzes strategic interactions and decision-making under uncertainty.
What fields use game theory?
—Game theory has applications in economics, biology, international relations, and even interpersonal relations.
Are strategic interactions always competitive?
—No, strategic interactions can be cooperative and lead to mutually beneficial outcomes.
What is the sunk cost fallacy?
—The sunk cost fallacy is the tendency to stick to a decision or project because of past investments, even when it's no longer beneficial.
How can game theory help in zero-sum situations?
—Game theory can help find opportunities for cooperation and mutually beneficial solutions in seemingly zero-sum situations.
00:00Game theory examines strategic interactions between people.
00:29John von Neumann wrote a book called the 'Theory of Games' and laid out game theory.
01:21Game theory expanded from economics to various fields, like biology and international relations.
02:33Game theory shows that seemingly zero-sum situations can have opportunities for cooperation.
03:57The sunk cost fallacy can be costly in poker and life, and it's important to recognize and overcome it.
05:20Game theory helps in decision-making by minimizing maximum loss in zero-sum games.
06:54Game theory can ensure guarding against the worst-case scenario in zero-sum games.
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