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Economics and the Theory of Games


  • Date Published: October 2003
  • availability: Available
  • format: Hardback
  • isbn: 9780521772518

£ 134.99

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About the Authors
  • This textbook offers a systematic, self-contained account of the main contributions of modern game theory and its applications to economics. Starting with a detailed description of how to model strategic situations, the discussion proceeds by studying basic solution concepts, their main refinements, games played under incomplete information, and repeated games. For each of these theoretical developments, there is a companion set of applications that cover the most representative instances of game-theoretic analysis in economics, e.g. oligopolistic competition, public goods, coordination failures, bargaining, insurance markets, implementation theory, signaling and auctions. The theory and applications covered in the first part of the book fall under the so-called 'classical' approach to game theory, which is founded on the paradigm of players' unlimited rationality. The second part shifts towards topics that no longer abide by that paradigm. This leads to the study of topics such as the interplay between evolution and rationality.

    • Covers all aspects of game theory (now a wide field), including topics of social learning, evolution, rationality, multiple equilibria
    • Balances theory and applications; author known in US as well as Europe
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    Product details

    • Date Published: October 2003
    • format: Hardback
    • isbn: 9780521772518
    • length: 526 pages
    • dimensions: 254 x 178 x 29 mm
    • weight: 1.12kg
    • contains: 84 b/w illus. 55 tables 227 exercises
    • availability: Available
  • Table of Contents

    Part I. Theoretical Framework:
    1. Introduction and examples
    2. The representation of a game in extensive form
    3. The representation of a game in strategic form
    4. The mixed extension of a game
    5. Mixed and behavioral strategies
    6. Representation in coalition form
    Part II. Strategic-Form Analysis: Theory:
    7. Dominance and iterative dominance
    8. Nash equilibrium
    9. Zero-sum bilateral games
    10. Nash equilibrium: formal existence results
    11. Strong and coalition-proof equilibrium
    12. Correlated equilibrium
    13. Rationalizability
    Part III. Strategic-Form Analysis: Applications:
    14. Oligopoly (I): static models
    15. Mechanism design (I): efficient allocation of public goods
    16. Mechanism design (II): Nash implementation
    17. Markets (I): macroeconomic coordination failures
    Part IV. Refinements of Nash Equilibrium: Theory:
    18. Introduction
    19. Refinements excluding 'incredible threats': examples
    20. Subgame-perfect equilibrium
    21. Weak-perfect Bayesian equilibrium
    22. Refinements excluding 'untenable beliefs': examples
    23. Sequential equilibrium
    24. Perfect and proper equilibria
    25. Strategic-form refinements
    Part V. Refinements of Nash Equilibrium: Applications:
    26. Oligopoly (II): sequential moves
    27. Markets (II): decentralized price formation
    28. Oligopoly (III): differentiated products
    29. Mechanism design (III): efficient allocation of an indivisible object
    Summary, Exercises
    Part VI. Incomplete Information: Theory:
    30. Introduction and examples
    31. Bayesian games
    32. Bayes-Nash equilibrium
    33. Signalling games
    34. Mixed strategies revisited: a purification approach
    35. Forward induction
    Part VII. Incomplete Information: Applications:
    36. Markets (III): signalling in the labor market
    37. Markets (IV): insurance markets and adverse selection
    38. Mechanism design (IV): one-sided auctions
    39. Mechanism design (V): buyer-seller trade
    Part VIII. Repeated Interaction: Theory:
    40. Introduction and examples
    41. Repeated games: basic theoretical framework
    42. Folk theorems: Nash equilibrium
    43. Reputation and 'irrationality': informal discussion
    44. Folk theorems: subgame=perfect equilibrium
    45. Reputation and 'irrationality': formal analysis
    Part IX. Repeated Interaction: Applications:
    46. Oligopoly (IV): intertemporal collusion in a Cournot scenario
    47. Oligopoly (V): intertemporal collusion in a Bertrand scenario
    48. Markets (V): efficiency, wages and unemployment
    Part X. Evolutionary Foundations of Equilibrium:
    49. Introduction
    50. Static analysis
    51. Basic dynamic analysis
    52. Evolution in social environments
    53. The evolution of cooperation: an example
    Part XI. Learning to Play:
    54. Introduction
    55. Reinforcement learning
    56. Static perceptions and Nash equilibrium
    57. Memory, expectations and foresight
    Part XII. Social Learning and Equilibrium Selection:
    58. Introduction
    59. Evolutionary games: theoretical framework
    60. Evolutionary games: alternative scenarios
    61. Stochastic stability and equilibrium selection
    62. Experimental evidence
    63. Perturbed Markov processes: basic concepts and techniques
    64. Reinforcement learning with flexible aspirations

  • Author

    Fernando Vega-Redondo, Universidad de Alicante

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