Game theory turns oligopoly interdependence into a table of payoffs
At A-level, oligopoly means interdependence: each firm's best move depends on what its rivals do. Game theory makes that exact. It studies situations in which players make decisions and then receive payoffs that depend on what the other players decide. Take two firms choosing whether to advertise. Advertising costs money and mostly wins customers from the rival, so if both advertise the gains cancel out and only the costs remain.
Two firms can advertise or not. Advertising costs money and mainly steals customers from the rival. What do you think they end up doing?
Each firm earns more by advertising whatever the other does, so both advertise, even though each would earn more if neither did. Knowing that the pair would do better does not change what each one does alone.