Methodologies(2 The ability to develop good theoretical explanations of firm behavior is due to the developments in non cooperative game theory in the 1970s Non-cooperative game theory consists of tools that are used to model the behavior or choices of agents(individuals, firms, etc. when the payoff (profit) of a choice depends on the choices of others The focus of the new lo on the conduct of firms in imperfectly competitive markets involves determining the factors and strategies that provide firms with a competitive advantage. With its focus on the nature and form of rivalry in concentrated markets, much of lo is a theory of business strategyMethodologies (2) • The ability to develop good theoretical explanations of firm behavior is due to the developments in non￾cooperative game theory in the 1970s. Non-cooperative game theory consists of tools that are used to model the behavior or choices of agents (individuals, firms, etc.) when the payoff (profit) of a choice depends on the choices of others. • The focus of the new IO on the conduct of firms in imperfectly competitive markets involves determining the factors and strategies that provide firms with a competitive advantage. With its focus on the nature and form of rivalry in concentrated markets, much of IO is a theory of business strategy