In 1944, the mathematician John Von Neumann and the economist Oskar Morgenstern founded the modern theory of games with the publication of their book *Theory of Games and Economic Behavior*. Game theory aims to understand and give advice to individuals, countries, and businesses that find they are faced with a choice of actions to which one or more opponents can respond, and want to choose an action which gives rise to the best "payoff."

A wide variety of applied situations ranging from voting, bankruptcy, fair division, and auctions profit from using the kind of thinking that arises in the theory of games. Many solution concepts will be studied as well as "paradoxical games" (e.g chicken and prisoner's dilemma) where seemingly rational behavior yields a worst outcome for all the players.