Asked by Misfit Kitty on Mar 10, 2024

Verified

An analytical approach through which strategic choices can be assessed is called:

A) cost-benefit analysis.

B) econometric theory.

C) game theory.

D) monopolistic competition.

A) cost-benefit analysis.

B) econometric theory.

C) game theory.

D) monopolistic competition.

Game Theory

A study of strategic decision making, analyzing interactions with formalized incentive structures ("games").

Strategic Choices

Decisions made by individuals or organizations that have significant long-term implications on their objectives and activities.

- Clarify the principles of dominant strategies and Nash equilibrium as they apply to game theory.
- Explain the manner in which game theory offers a structure for comprehending strategic decisions within competitive contexts.

Verified Answer

SS

Satyam Sharma

Mar 10, 2024

Final Answer :

C

Explanation :

Game theory is a mathematical approach to analyze strategic decision making. It considers the behavior and decisions of all parties involved, predicts their possible choices, and determines the best course of action. This approach helps in determining the optimal strategies in different scenarios, such as businesses, economics, and politics. On the other hand, cost-benefit analysis is a financial method to compare the benefits of an investment against its costs; econometric theory is a statistical approach to measure economic relationships; monopolistic competition is a market structure where several firms compete on a differentiated product.

## Learning Objectives

- Clarify the principles of dominant strategies and Nash equilibrium as they apply to game theory.
- Explain the manner in which game theory offers a structure for comprehending strategic decisions within competitive contexts.