n. A branch of mathematics that deals with strategies for maximizing gains or minimizing losses in competitive situations having defined constraints and involving random factors. Game theory is used for modelling and analysis of various decision-making situations such as military strategy or business policy. The theoretical models study the interactions among opposing entities called "players," where different kinds of situation can arise, for which the probabilities of occurence are known. Also known is the set of decisions each player can take. When a player takes a decision he makes a gain or incurs a loss. Based on the available knowledge each player tries to adopt a "strategy" so as to maximize his gains. The entire procedure constitutes a game. Syn. -- theory of games. [ WordNet 1.5 ]
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