Game Theory and Strategic Behavior

Game Theory is the study of strategic decision-making among individuals or entities, where the outcome depends on the choices of all participants. In International Industrial Economics, it helps analyze how firms and countries interact, compete, and cooperate in the global market. For example, companies may decide whether to compete aggressively on pricing or collaborate on research, while countries may negotiate trade agreements or impose tariffs. Understanding these interactions helps predict behaviors and optimize strategies, leading to better economic outcomes for businesses and nations.