Game theory is the study of mathematical models of strategic interactions among rational agents. It is a theoretical framework for conceiving social situations among competing players. The focus of game theory is the game, which serves as a model of an interactive situation among rational players. The key to game theory is that one players payoff is contingent on the strategy implemented by the other player. Game theory applies to a wide range of behavioral relations, and it is now an umbrella term for the science of logical decision making in humans, animals, as well as computers.

Game theory has a wide range of applications, including psychology, evolutionary biology, war, politics, economics, and business. It is used to analyze situations in which parties, called players, make decisions that are interdependent. Game theory is the study of how competitive strategies and participant actions can influence the outcome of a situation. It is the mathematical study of strategies to compete against opponents as good or better than you.

Game theory is a major method used in mathematical economics and business for modeling competing behaviors of interacting agents. Applications include a wide array of economic phenomena and approaches, such as auctions, bargaining, mergers and acquisitions pricing, fair division, duopolies, oligopolies, social network formation, agent-based computational economics, general equilibrium, mechanism design, and voting systems. Game theory can also be used to analyze cooperation between firms, such as in forming strategic alliances or joint ventures.

In summary, game theory is a mathematical framework for analyzing strategic interactions among rational agents. It has a wide range of applications in various fields, including economics, business, politics, and biology.