Importance of Game Theory

Zero Sum Game:

One person’s loss is another person’s loss, a fixed amount is divided among the winners & losers.

Non Zero Sum Game:

All players may gain from an individual decision, where interacting parties gain or loss is less or more than zero and every one can gain, may win, a win win game.

Co-operative Games:

Emphasize participation, challenge & fun rather than defeating someone. Collusion is possible & play to each other rather than competition. 

Non Co-operative Game:
Where players make the decision independently. Players may communicate but they can not make binding agreements or enforceable contract.

Importance of Game Theory

It is useful for understanding the behavior or oligopolies, where the players are firms & their game is played in markets, strategies are pricing/ output decisions and the payoffs are their profits.
Each firm must act strategically & knows that its profit depends not only on how much it produces but also on how much the other firms produce. Like wise how its decision might affect the production decisions of all the other firms.
As the number of non cooperative oligopolist enlarges price & output tend to PC market.
If firms decide to collude rather than compete, the market price and quantity will be close by a monopoly.