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Question

The basic objective of applying the game theory is :

This question was previously asked in
MH SET 2023 Paper 2 Computer Science and Applications Question Paper (26-Mar-2023)
The correct answer is

To arrive at the dominant strategy

Game theory studies strategic interaction, where the outcome for each decision-maker depends on the choices of others. Each player chooses among strategies by considering how rivals are likely to respond, and the analysis seeks the best course of action for each player.

The purpose of applying game theory is to identify the strategy a player should adopt. A dominant strategy is one that gives a player the best payoff whatever the rival does, and when it exists it is the natural solution of the game, as in the prisoner's dilemma. Finding such a best strategy, and the equilibrium it leads to, is the basic objective of the analysis.

Maximising profit, maximising sales and minimising marginal cost are objectives of a single firm in conventional theory of the firm. They may be the payoffs players care about, but they are not the objective of the game-theoretic method itself, which is about choosing strategies under interdependence.

To arrive at the dominant strategy option is correct.

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