Write an essay on game theory regarding oligopolies
One thing that makes us human is that we cannot exist without interacting with one another. Sometimes, it may seem like we have always found a way to survive, even with these interactions. Our economic structures and development call for these interactions because there would be no production or exchange if there is no understanding between individuals. In all situations, consumers consider what producers are making and their affordability before making the consumption decision. On the other hand, manufacturers look at how much consumers are buying their products before making production decisions. However, these interactions are not always good; sometimes, they cause disastrous confrontations, which could turn out really bad.
An oligopoly is a market structure in which a few firms dominate. When a market is shared between a few firms, it is said to be highly concentrated. Although only a few firms dominate, it is possible that many small firms may also operate in the market. Oligopolies may be identified using concentration ratios, which measure the proportion of total market share controlled by a given number of firms.
Any situation in which the outcome is dependent on the choices of two or more people is what defines an interactive decision. Game theory studies the human behavior involved in these strategic settings, which surround the interactive decisions. In order to label a social interaction a game there needs to be two or more decision making agents, called players, each with two or more options to act upon, called strategies, and a clear understanding of what each. Game Theory was said to have been introduced by Emile Borel in Borel was a French mathematician who published papers on the theory of games.
Please join StudyMode to read the full document. Game Theory and Business Game theory emerged as a scholarly field of study in the first half of the 20th century. Since that time, it has significantly affected various academic disciplines, such as economics, political science and biology. Although the term " game theory " may suggest a certain frivolity, the concepts underlying it have many real-world applications and offer a structured and logical method of considering strategic situations. The parallels between competitive games and strategic business situations should be fairly obvious.