They each face a five-year prison sentence if they confess.The two prisoners are unable to speak with one another. Officials, however, take the inmates out of their isolation cells and question each one separately in order to extract a confession. The prosecution lacks concrete proof to prove their guilt. Take two offenders who were detained following an arrest as an example. The most well-known application of game theory is The Prisoner’s Dilemma. Game theory examines how people interact in a variety of games and can be used to identify the optimal outcomes for each player. It uses tools from mathematics, economics, and psychology to analyze how people make choices when their outcomes are dependent on the actions of others.

Game theory is a branch of mathematics and economics that looks at how players make decisions in strategic situations. The goal is to find the best strategy for each person. These strategies can be either friendly or competitive. It looks at when multiple people make decisions and have strategies. Game theory is a way of using math to look at different situations. What is Game Theory?īefore we learn how to use game theory in our everyday lives, let’s first understand what it is.

In this blog post, we’ll explore some ways in which an ordinary person can use game theory to make better decisions and achieve their goals. Contrary to popular belief, game theory isn’t just utilized by economists and political scientists it can be implemented in our everyday lives as well, such as in board games, poker, and war, and can be used to identify the optimal outcomes for each player.

Example of game theory in real life