this is a nice intro book with lots of cool examples and problems: Playing for Real
The answer to this question is the Holy Grail of economics. It can be discussed, but it can't be answered. We are not even close yet. If you only have a little time, read this: http://en.wikipedia.org/wiki/Game_theory. If you want more depth, try this: http://www.amazon.com/Playing-Real-Text-Game-Theory/dp/0195300572