Game theory helps in understanding the rewards and risks associated with each decision by providing a mathematical framework for predicting the outcomes of a game or a competitive situation. It allows individuals to anticipate the reactions of their competitors and adjust their strategies accordingly. For instance, in the example from the television show Survivor, a candidate decided to 'win by losing'. By throwing their chance to win, they set a series of events in motion that eliminated some of the competition, allowing them to eventually win the game. This demonstrates how game theory can be used to strategize and potentially come out on top in any contest.

Game theory contributes to the field of strategic management by providing a mathematical framework for predicting the outcome of competitive situations. It allows managers to anticipate the reactions of competitors to different situations, which can help in devising strategies that can lead to a competitive advantage. For instance, in the example from the TV show Survivor, a contestant strategically 'won by losing', setting off a series of events that eliminated competition and eventually led to their victory. This demonstrates how understanding and anticipating the actions and reactions of others can lead to strategic success.

Game theory is widely used in various real-life scenarios. For instance, in economics, it is used to model competition and cooperation between intelligent rational decision-makers. In politics, game theory is used to model the behavior of voters, politicians, and governments. In computer science, it is used in artificial intelligence and cybernetics. In biology, it is used to understand and predict animal behavior. In social psychology, it is used to model social interactions and behaviors.

The principles of game theory can be used in decision making by anticipating the situation and predicting the outcome of a game. This involves studying the competition and their reaction to any situation that is presented. For instance, in the television show, Survivor, a candidate decided to 'win by losing', which set a series of events in motion that eliminated some of the competition, allowing that candidate to eventually win the game. Therefore, by using game theory, it is possible to even the score or come out on top as the winner in any contest.

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