A Overview on Decision Theory, Game Theory and Some Applications in Economics and Other Social Sciences

Abstract

Decision theory and Game theory are the special branches of mathematics that are mostly applicable in social sciences, economics, and commerce as well as in engineering sciences, Biology etc. It is the study of strategy and conflict in which agent success in making choices depending on the choice of the other opponent. It was initially developed in economics to understand a large collection of economic behaviors of firms, markets and consumers. This theory has been used to attempt or to develop theories of ethical and normative behaviors as well. Applied game theory is helpful in understanding the rational behavior of economics and philosophy. The purpose of this paper is to clarify the following. First is to provide very brief overview of decision theory, game and game theory, second to discuss background and impact of game theory, third to analyze the prisoner’s dilemma game and finally to present applications of it and special attention to economics and other social sciences.