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    Game Theory

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    Describe a political, economic, or social interaction of decision makers that you have witnessed or heard about in words. The situation should involve decision makers (players), available actions (strategies), and outcomes that correspond to combinations of actions. The example can be anything from international relations (treaties, trading agreements, wars), to government policies, social interactions of people, interactions of your colleagues, classmates at work etc.

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    Consider the case of competition between companies. Let us say that both McDonald and KFC are interested in expanding to a new country (currently there is no fast food brands in this country). Because two brands are equally powerful, they each gained 50% of the market share, and let us just say that 50% market share leads to 10 million dollars of revenue every year (so the country spends 20 million dollars on fast food every year).

    Either firm could decide to put more money input marketing. If ...

    Solution Summary

    Game theory described in politics, economic and social interactions of decision makers.