ABSTRACT
Game theory is concerned with the analysis of conscious interactions between agents. Each player behaves strategically in the sense that, in deciding which course of action to take, he takes into account the possible effects on the other players and the fact that the latter behave in the same way. Ecomonic life is replete with situations fitting the preceding description: oligopolistic markets, international trade policy, bargaining problems, international effects of macro-economic policies, the relation between governments and private agents etc. In fact, there is now a long history of the use of game-theoretical reasoning in economics.
