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The Complete Idiot's Guide to Game Theory by Edward Rosenthal, Ph.D., Edward C. Rosenthal

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Decision Theory

One type of “gaming” behavior that takes place quite often in the business world is called revenue management. If you offer a certain product or service, how can you tweak the prices, promotions, or availability in a way that maximizes your profit? The analysis for such a situation is called decision theory.
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DEFINITION
Decision theory refers to a set of methodologies based on expected values, maximin, and related criteria that are used to select the best alternative when a decision maker is faced with uncertainty.

Strategic Choices

Suppose you are an airline executive tasked with the job of analyzing a particular flight ...

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