# Game Theory

*Macro & Economy — Finicade finance glossary*

Game theory studies decisions where your best move depends on what others do. Finance is full of such situations: bank runs, price wars, bidding in auctions, whether to sell into a falling market. The prisoner's dilemma is the canonical result — individually rational choices producing a collectively worse outcome — and it explains why coordination problems persist even when everyone can see the better answer.

**Also known as:** strategic interaction, prisoner's dilemma

**Related terms:** [Nash Equilibrium](https://finicade.com/glossary/nash-equilibrium), [Supply and Demand](https://finicade.com/glossary/supply-and-demand), [Bank Run](https://finicade.com/glossary/bank-run), [Market Manipulation](https://finicade.com/glossary/market-manipulation), [Moral Hazard](https://finicade.com/glossary/moral-hazard)

Source: https://finicade.com/glossary/game-theory