Game theory is a mathematical framework to understand how decision-makers make choices and interact strategically in situations where the outcomes of their decisions depend not only on their own actions but also on the actions of others. I have used game theory to study and analyse strategic interactions between decision-makers and competitors. Markets are not perfectly efficient they are discovery mechanisms, and through this discovery process it will clarify what people will willing to pay for. Therefore, price reduction is not a strategy as there is an appropriate level of costs for your business and for the market niche you seek to fill.

I think you can’t really understand human behaviour unless you understand game theory because we are social species and most of our mental evolution has evolved by developing how to second guess other people.