Mathematical principles play a crucial role in the study of game theory and decision-making in economics by providing a framework for analyzing strategic interactions between rational agents. Game theory uses mathematical models to study decision-making in competitive situations where the outcome of one player's decision depends on the decisions of others. Mathematical principles such as optimization, probability theory, and equilibrium analysis are applied to analyze and predict the behavior of individuals and firms in strategic interactions. These principles help economists understand how individuals make decisions under uncertainty and strategic considerations, leading to valuable insights into market dynamics, bargaining strategies, and competitive behavior.
