Game theory is a mathematical framework used for analyzing strategic interactions where the outcome for each participant depends on the actions of all involved. It provides insights into competitive and cooperative behaviors in economics, politics, and beyond, helping to predict and explain decision-making processes in complex scenarios.
A Stackelberg Game is a strategic game in economics and related fields where one player, the leader, commits to a strategy first, and then the follower chooses their strategy with knowledge of the leader's action. This model is pivotal in understanding sequential decision-making processes and is widely applied in market competition, policy-making, and supply chain management.