Step 1: Rewrite the angle.
We have
\[
\frac{7\pi}{8}
=
\pi-\frac{\pi}{8}
\]
Using the identity
\[
\tan(\pi-\theta)=-\tan\theta,
\]
we get
\[
\tan\left(\frac{7\pi}{8}\right)
=
-\tan\left(\frac{\pi}{8}\right)
\]
Step 2: Find the value of \(\tan\left(\frac{\pi}{8}\right)\).
Using the standard identity,
\[
\tan\left(\frac{\pi}{8}\right)
=
\sqrt{2}-1
\]
Therefore,
\[
\tan\left(\frac{7\pi}{8}\right)
=
-(\sqrt{2}-1)
\]
\[
=1-\sqrt{2}
\]
Step 3: Final conclusion.
Hence,
\[
\boxed{1-\sqrt{2}}
\]
which corresponds to option (2).