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Decision and game theory

DOI: 10.4324/9780415249126-Q023-1
Version: v1,  Published online: 1998
Retrieved June 13, 2024, from

Article Summary

Decision theory studies individual decision-making in situations in which an individual’s choice neither affects nor is affected by other individuals’ choices; while game theory studies decision-making in situations where individuals’ choices do affect each other. Decision theory asks questions like: what does it mean to choose rationally? How should we make choices when the consequences of our actions are uncertain? Buying insurance and deciding which job to take are examples of the kind of decisions studied by this discipline. Game theory instead applies to all decisions that have a strategic component. The choices of an oligopolist, voting strategies, military tactical problems, deterrence, but also common phenomena such as threatening, promising, conflict and cooperation are its subject matter. In a strategic situation, the goal is not just to choose rationally, but to choose in such a way that a mutual solution is achieved, so that choices ‘coordinate’ in the right way. The formal methods developed by game theory do not require that the subject making a choice be an intentional agent: coordinated interaction between animals or computers can be successfully modelled as well.

Citing this article:
Bicchieri, Cristina. Decision and game theory, 1998, doi:10.4324/9780415249126-Q023-1. Routledge Encyclopedia of Philosophy, Taylor and Francis,
Copyright © 1998-2024 Routledge.

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