Keywords:-

Keywords: Game Theory, Economic Decision-Making, Strategic Interaction, Nash Equilibrium, Behavioral Economics, Market Competition, Oligopoly, Auction Theory, Contract Design, Policy Regulation

Article Content:-

Abstract

Game theory serves as a cornerstone of modern economic analysis by providing a systematic framework for understanding strategic interactions among rational agents [1], [2]. It allows economists to model and predict outcomes in situations of competition, cooperation, and conflict, where the actions of one participant directly affect the payoffs of others. Through constructs such as payoff matrices, dominant strategies, and Nash equilibrium [3], [4], game theory clarifies how rational actors choose optimal strategies under interdependent and uncertain conditions. Its applications extend from industrial organization and market competition [5] to public policy, contract theory, and auction design [6], [7]. When integrated with behavioral insights [8], [9], game theory enhances the realism of economic models by incorporating bounded rationality, learning, and cooperation. This synthesis bridges mathematical precision with behavioral realism, enabling decision-makers to anticipate strategic reactions, design efficient mechanisms, and achieve stability and fairness in economic systems. Ultimately, game theory not only enriches theoretical understanding but also informs smarter, more strategic decision-making in an interconnected global economy.

References:-

References

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Khairkhar, V., Gargote, A., & Gore, H. (2026). Game Theory and Behavioral Insights in Economic Decision Making. International Journal Of Mathematics And Computer Research, 14(03), 91-95. https://doi.org/10.47191/ijmcr/v14iSPC3.19