Application of Two-Player Game Theory in Economics

Abstract

The concern of this thesis is to discuss different applications of two-player game theory in economics. It is divided into two main chapters - the theoretical part and the practical part. The theoretical part is composed of the classical game theory and the game theory with vector payoffs. In the first instance basic ideas of the classical game theory is introduced. Elaboration of the duopoly model follows. Subsequently basic ideas of the theory with vector payoffs and one of the solution concepts of game theory with vector payo s are included. The practical part follows. This part contains two examples which are the real application of the concept described in the theoretical part