Game theory was developed in the 20th century by John von Neumann, known as the father of game theory. Von Neumann was born in 1903 in Budapest, Hungary and received his PhD in mathematics from Pázmány Péter University at age 22. He later became a professor at Princeton University. Game theory analyzes strategic decision making among competitors and considers factors like each player's possible actions and the outcomes or payoffs that result from different combinations of actions.