Game theory, the study of strategic decision-making, has long been a tool for economists, mathematicians, and political scientists to analyse human behaviour in competitive scenarios. ​​While theoretical models often seem far removed from daily life, Squid Game, the Netflix phenomenon, brings these principles to life in the most visceral way possible.

Set against the backdrop of a dystopian society, the show follows 456 financially desperate participants who compete in a series of deadly games inspired by childhood playground activities. The winner takes home 45.6 billion won (approximately USD 38 million), while the rest face lethal elimination.

Beyond its gripping narrative and social commentary on inequality, debt, and human desperation, the show serves as an intriguing case study in strategy and decision-making. Each game presents life-and-death stakes, forcing players into dilemmas that mirror real-world applications of game theory concepts. 

Let's take a look at how each game featured in the show represents the 'game theory' in action.

Red Light, Green Light

The series opens with a deadly version of the childhood game where players must cross a field without being caught moving during a 'red light'. The sudden realisation that 'elimination' means death throws the players into chaos, with many making irrational decisions. This game exemplifies how panic can disrupt rational decision-making, a cornerstone of game theory. Success comes to those who can adapt quickly and use their surroundings creatively, as seen when some players shield themselves from others to reduce risk. The Nash equilibrium here is strikingly simple: move cautiously, minimising risk exposure. Yet, emotional reactions often lead players to deviate from optimal strategies. 

Dalgona

The honeycomb candy challenge is a textbook example of a perfect information game, where all participants are fully aware of the rules and outcomes of their choices. Players must extract a shape from brittle candy without breaking it, with the difficulty level depending entirely on their initial selection. The uneven distribution of the difficulty showcases the role of chance in perfect information scenarios. While the triangle offers an easier path, the umbrella is a near-impossible challenge. Players who innovate—like licking the candy to dissolve the edges—demonstrate that even in a structured game, creativity can tip the scales in your favour.

Tug of War

In this team-based game, survival hinges on cooperative strategy. Two teams pull against each other, with the losing side plunged to their deaths. While physical strength plays a role, the game ultimately highlights the power of coordination and tactical planning. This is an example of a zero-sum game, where one team's gain is directly proportional to the other's loss. The main character Gi-hun's team, composed of perceived underdogs, employs strategic positioning and synchronisation to overcome their disadvantage. The outcome reinforces the importance of collective action and trust in group dynamics—a hallmark of cooperative game theory.

Marbles

Marbles brings back the focus to a zero-sum game with emotional undertones. Players are paired with someone they trust, only to learn that they must win all of their partner's marbles to survive. This scenario forces participants to choose between cooperation and betrayal, mirroring the classic prisoner's dilemma. Initially, some pairs attempt to work together, but the inevitability of the rules leads to betrayals and manipulation. The game exposes the tension between rational self-interest and moral integrity, emphasising the harsh reality that survival often demands difficult choices.

Glass bridge

The glass bridge game exemplifies sequential decision-making, where players must cross a series of glass panels, each with a 50% chance of shattering. Early players face the greatest risk, serving as unwitting test subjects for those who follow. This game illustrates the principle of observational learning, with the later participants benefiting from the sacrifices of those before them. However, as the number of players dwindles, competition intensifies, and the positional advantage becomes increasingly significant. The scenario highlights the balance between risk and reward in sequential games.

Squid game

The titular squid game is a demonstration of extensive form games, where decisions unfold over multiple stages. The game pits two opponents against each other in a contest of strength, wit, and psychological manipulation. Strategic dominance is central here. Players must anticipate their opponent's moves while concealing their own intentions. Gi-hun's decision to forgo the final kill, opting instead to challenge the system, introduces a human element to the otherwise cold logic of game theory. It is a reminder that even in the most calculated scenarios, empathy and defiance can alter outcomes.

Mingle

The merry-go-round game featured in Season 2 tests players' ability to form groups under extreme time pressure. After each round, ungrouped individuals face elimination. This game is a classic coordination problem, where participants must act quickly to secure their survival while balancing the dynamics of alliances. As the game progresses, the scarcity of available slots intensifies competition. This mirrors real-world social dilemmas, where resource constraints force individuals to navigate between collaboration and competition. The game also mirrors musical chairs, illustrating how scarcity amplifies the stakes in strategic interactions.

Beyond its entertainment value, Squid Game serves as a poignant exploration of human behaviour under pressure. Each game reflects a fundamental concept in game theory, shedding light on how people navigate uncertainty, competition, and cooperation. The series also exemplifies the role of external factors—such as inequality, desperation, and trust—in shaping decisions not uncommon in marketing or business practices.