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game theory

Definition:
A theory developed out of the pioneering work of Von Neumann and Morgenstern contained in their The Theory of Games and Economic Behaviour (1944). The theory seeks to extend the conventional micro-economic analysis in which decisions are made under conditions of certainty into situations where the decision-maker is operating under conditions of risk or uncertainty and having to interact with other decision-makers, often in a competitive situation. In very general terms games may be divided into zero sum situations, where the gain of one participant represents the loss of another participant, and non-zero sum games, where it is possible for all participants to gain.

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© Westburn Publishers Ltd 2002, The Westburn Dictionary of Marketing edited by Michael J Baker, ISBN 978-0-946433-01-8. www.themarketingdictionary.com. Entry: [Michael J. Baker],.