Social interaction is essential to human life. How do people choose what to do when they encounter one another? And how do organizations, firms or countries interact? Game Theory is a modeling tool designed to represent and analyze such strategic interaction. The first part of this book is devoted to introducing the basic building blocks of game theory. The parties to the interaction are called players, the courses of actions available to them are their strategies, and the payoffs of each player from the various profiles of strategies (of all players) represent the way each player ranks the possible outcomes of the interaction from her own individual point of view–
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