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Home > QFINANCE Dictionary > Definition of game theory

Definition of

game theory

General Management

technique for investigating consequences of strategies and conflicts a mathematical technique used in operational research to analyze and predict the outcomes of games of strategy and conflicts of interest. Game theory is used to represent conflicts and problems involved in formulating marketing and organizational strategy, with the goal of identifying and implementing optimal strategies. It involves assessing likely strategies to be adopted by players in a given situation under a particular set of rules.

Recommended Further Reading (Term count)
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    by David Shimko
    The origin of the term “real option” derives from financial options. For example, the right to buy a house for a fixed period of time at a fixed price is a call option,1 except that the underlying asset is a real asset, not a financial asset. Business people and economists discovered that many business processes involve options, and that financial mathematics can be brought to bear to value those options. Some popular examples include:the right...

Definitions of ’game theory’ and meaning of ’game theory’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’game theory’ and other financial terms with our online QFINANCE Financial Dictionary.

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