Chapter 1

Introduction to Game ­Theory

When I am getting ready to reason with a man, I spend one-third of my time thinking about myself and what I am going to say and ­two-thirds about him and what he is going to say.

Abraham Lincoln

Game theory embodies an essential way of looking at the world, giving us a collection of tools for decision making. It is a field of study by mathematicians, economists, and by managerial strategists as well. However, in this book we will keep the mathematics to a minimum and focus on how game theory can be used to improve our decision making. It will be necessary to learn some jargon along the way, but it must be noted that the point of learning game theory is not about memorizing vocabulary words; it is about ...

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