Cooperation in Game Theory

Abstract

The theory of games studies the problems of multi-person decisions and their applications over almost all areas of economics. At a micro level, for example, exchange models (negotiation and bidding) use the theory of games. At an intermediate aggregation level, the theory of games is used in company behaviour models (problems of this type typically arise in oligopoly situations), in the field of labour economics (several workers competing for promotion) or financial economics (investment decisions). Finally, at a higher level of aggregation, international economics uses models in which countries compete in tariff decisions; and in macroeconomics, game theory is applied to analyse the results of monetary policy.