Studies have shown that investors, politicians, and criminals use the same decision-making tools. Consider the following: Two members of a criminal gang are arrested and imprisoned. The prosecutors lack sufficient evidence to convict the pair on the principal charge, but they have enough to convict both on a lesser charge. The prosecutors offer each prisoner a choice: Each prisoner can admit they did the crime, betray the other by testifying that the other committed the crime, or remain silent. If both prisoners A and B each betray the other, each of them serves two years in prison. If A betrays B, but B remains silent, A will be set free and B will serve five years in prison (and vice versa). If A and B both remain silent, both of them will serve only one year in prison (on the lesser charge). Neither prisoner knows what the other will do. Game theory is the study of decision-making. We will discuss how this concept applies to investing, international negotiations, and personal interactions. All of the things that affect our daily lives.