The theory of random walks is a mathematical concept that describes a path consisting of a series of random steps. It is often used to model various phenomena in fields such as physics, economics, and biology. In a simple example, imagine a person taking steps in random directions; their overall position after many steps can be analyzed to understand patterns and probabilities. This theory helps in predicting outcomes in uncertain environments. For instance, in finance, it can explain stock price movements, suggesting that future prices are unpredictable and follow a random pattern. Overall, random walks provide valuable insights into complex systems influenced by chance.