Game theory is the study of strategic interdependence. To understand this theory in relation to the Elephant Money protocol, let us consider the case in which two players are Elephant Money users. Each player is given three possible actions: hold ("HODL"), bond, or sell.
HODL gives a value of +3, bonding gives a value of +1, and selling gives a value of -1. These numbers represent how much each action benefits the Elephant Money ecosystem and its users. When both players pick an action, we can visualize and evaluate how beneficial the outcome will be. To put it simply, the higher the value of the outcome, the more beneficial it is for all parties.
Bond = Elephant Money Futures or Stampede Perpetual Bonds
The table above shows that (3,3) is the most beneficial outcome, with the highest value of 6. This is the result of both players choosing to HODL. The least beneficial outcome is (-3,-3), with the lowest value of -6. This is the result of both parties choosing to sell. Although this interpretation is highly simplified, it points out that HODL would be the most beneficial strategy for both players.