What does game theory primarily study?

Game theory primarily studies strategic behavior in competitive situations. It provides a mathematical framework for analyzing situations where players make decisions that are interdependent, meaning the outcome for each participant depends not just on their own actions, but also on the actions of others. This approach is essential in understanding various competitive scenarios, whether in business, politics, or other fields where decision-making involves the considerations of other individuals or groups.

In the context of business, game theory examines how companies or individuals might strategize against one another in markets, leading to insights about pricing, product launches, or negotiations. By modeling situations of conflict and cooperation, game theory reveals how various strategies can lead to different outcomes, highlighting the importance of anticipating rivals' moves.

The other options—such as market economics, consumer behavior, and trade negotiations—are indeed related subjects, but they don't encapsulate the core focus of game theory as effectively as strategic behavior in competitive situations. Game theory is specifically concerned with the strategies players employ knowing that others are also strategizing, which is fundamental to its analysis.