The development of game theory is relatively new. It was developed in the 1940s by a Hungarian mathematician named John Von Neumann and later, further developed by John Nash in the 1950s. Game theory has been extensively used in the fields of Economics, Finance and Strategy. However, till date it remains an underutilized concept in the field of Management. Lots of developments have been done to the initial assumptions behind the foundations of game theory and to make it more practical but the situation has remained unchanged. This paper is an attempt to find out the basics of game theory and its possible applications in managerial decision-making and strategy formulation. The mathematical aspects have been left out for the sake of simplicity and conciseness.The Kolkata Book Fair in India, is held every year on the third week of January. It is the second largest book fair in the world (in terms of number of visitors) after the Frankfurt Book Fair. When I was a kid, I used to visit the fair more than once.

My father used to tell me, ìWe wonít go on the last day of the fair, because there will be a huge crowd. We will go on the penultimate dayî. Now, what used to happen is that the penultimate day used to experience the greatest number of visitors. The reason was that everybody thought in the same way like my father. I could understand the phenomenon somewhat when I grew up, but it was when I was doing my graduation in Economics, I realized that this is a classic example of Prisoners Dilemma, (this will be taken up in detail at a later stage) a case where individuals try to maximize their own benefits and end up losing as a community. The same phenomenon is going on in the book fair for the last ten years and every year, the same thing happens. Though game theory has an explanation to similar problems, (and others also) it may be because of the fact that ìThe sorts of situations that would allow the application of formal methods are so simple that people can understand them without much help1î . As according to Andy McLennan of the University of Minnesota, it is not taken up by the managers to a great extent.