Game theory is a term that we hear more and more often in relation to the game of poker. This may sounds esoteric and scary for some, but it does not have to be. Yes game theory can involve sharp mathematics, but the concept can be explained and made simple in lay terms.

Game theory is the mathematics of strategy. John Von Neumann, a Hungarian born mathematician, is considered the father of game theory. The sometimes poker player was inspired by the game to develop this branch of mathematics in the late 1920s.

Game theory studies decisions made in an environment where various participants interact. It takes into account the variety of choices that each person has at each point in the process and determines optimal behavior when weighed against the costs and the benefits of each action.

Unless a one-player game, a player’s choices will be influenced by the actions and behaviors of other participants. The games studied by game theorists consist of a set of players, a set of moves, or strategies, and a specification of the payoffs (benefits) for each combination of strategies.

Games fall under different categories. Poker is a zero-sum game. This means that the total value of the game stays the same or goes down. Zero-sum games provide benefit to only some players and always at the expense of others.

This is game theory in a nutshell. The main point with regard to poker is that each player should play depending on how the other players play. And may also play on how he thinks the other players will play based on his representation of how they are trying to optimize their profits.

In other words words the mathematics of game theory go like in a self-feeding loop, where the behavior of others will change our behavior, which in turn changes their behavior. In fact this is what the top pros master well, as they understand intuitively very well how they can play in a way to induce others to make mistakes.