The aim of this paper is to explain game theory which has a wide range of applications including psychology, evolutionary biology, war, politics, economics and business. Despite the great progress, game theory is still considered a young and developing science. According to game theory, the actions and choices of all participants affect the outcome of each of them. The paper presents the classification of game theory and its application in economics and everyday life. Game theory is an important tool for understanding strategic decision-making in various fields. The conclusion of this paper indicates that game theory has proven to be a valuable tool for understanding decision-making and strategic behavior in different contexts. From economics to political science, game theory helps gain insight into the dynamics of competitive and cooperative interactions between individuals and groups.