Game Theory

The mathematical study of strategic interaction between rational decision-makers. When your outcome depends not just on your choices but on others' choices, you're in a game. Game theory provides frameworks for analyzing cooperation, competition, negotiation, and conflict: prisoner's dilemma, Nash equilibrium, dominant strategies, and repeated games. The key insight is that optimal strategy depends on what others will do.

When to use it

When your outcome depends on others' decisions. When designing auctions, incentives, or competitive strategies. When negotiating. When analyzing why cooperation is or isn't emerging.

How it can help

Essential for any strategic situation involving other actors—negotiations, competitive strategy, alliance formation, pricing, and organizational politics. Helps predict others' behavior by analyzing their incentive structures and available strategies.