97 Game Theory—A Theory of Contradiction! GAME THEORY --A THEORY OF CONTRADICTION !! Dr. SANTANU RAKSHIT After 1994, in 2005, Nobel Prize in Economics was awarded again for game theory. In 1994, John Nash for his original contribution in game theory and with him two other eminent economists for their application of game theory in economics got this prestigious award. It would be interesting to remind that in 2002 the Oscar winning film of Russel Crowe – ‘A Beautiful Mind’-was based on the life of John Nash, the proponent of Game theory. In 2005, Robert Awwmen and Thomas Scheiling were awarded the Nobel Prize for their most frontline application of game theory in economics. Awwmen and Scheiling are presently engaged in teaching, respectively in the Hebrew University of Israel and University of Merryland in USA. But what actually is game theory? Where does its importance lie? Let us start with an extraordinary assumption that –in capitalists state owners of free capital i.e. the producers determines the quantity of production or price level of their goods, homogenous or differentiated without any negotiation with each other. According to this assumption, during the initial period of development of capital severe contradiction between the owners of capital (rather entrepreneurs?) is preordained. On the other side the continuous evolution of market is an important process in capitalism. If we go through any simple textbook of Microeconomics we would be forced to think that the consequence of the evolution of market that is the evolution of capital from the state of perfect competition in market to its monopolisation and subsequent establishment of oligopoly is very much natural and logical phenomenon. Oligopoly means the coexistence of such owners of free capital, or free capitalist whose objective is to monopolise the ownership of capital and thus market. Readers are bound to get confused and can certainly put up the question-how such peaceful coexistence is possible without any understanding or collusion? Severe disagreement should be the only outcome in such cases. Then are we proceeding with a wrong assumption? Does capitalists colludes or make understanding? As a result a stable solution is necessary for Oligopolistic market, which can depict the presence of collusion, if any, in the form of apparent contradiction. In his early age, during the first half of the last century, John Nash pursuing research on mathematics imagined the concept of game theory. But in the following years of his conceptualisation of game theory due to his mental illness he failed to engage in further research. As a result he himself remained ignorant on the potentiality of the application of the game theory. In the mean time his theory was widely acclaimed and found its application enormously, particularly in subjects like Economics, Statistics. Genetics, political Science and various other subjects. In Economics the theory got its most serious use in the determination of equilibrium in the Oligopolistic market system. We would initially try to depict the fundamental premises of game theory. In general terms Nash’s game theory explicates how the different player apply optimal strategy among different feasible strategies available to them without getting into any collusion and attain an equilibrium situation. A hypothetical example in common man