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This paper presents a novel cooperative-driving prediction and planning framework for dynamic environments based on the methods of game theory. The proposed algorithm can be used for highly automated driving on highways or as a sophisticated prediction module for advanced driver-assistance systems with no need for intervehicle communication. The main contribution of this paper is a model-based interaction-aware motion prediction of all vehicles in a scene. In contrast to other state-of-the-art approaches, the system also models the replanning capabilities of all drivers. With that, the driving strategy is able to capture complex interactions between vehicles, thus planning maneuver sequences over longer time horizons. It also enables an accurate prediction of traffic for the next immediate time step. The prediction model is supported by an interpretation of what other drivers intend to do, how they interact with …