Economics and the Theory of Games

This textbook provides a comprehensive overview of modern game theory and its applications to economics, covering strategic situations, basic solution concepts, incomplete information games, and repeated games. It emphasizes the classical approach to game theory and discusses the interplay between evolution and rationality.

Format: Paperback / softback
Length: 174 pages
Publication date: 29 July 2022
Publisher: Taylor & Francis Ltd

This comprehensive textbook provides a systematic and self-contained exploration of modern game theory and its diverse applications in economics. It begins by delving into the process of modeling strategic situations, encompassing a detailed account of how to construct game-theoretic models. The discussion then proceeds to examine fundamental solution concepts, their various refinements, games played under incomplete information, and repeated games. For each of these theoretical advancements, there is a corresponding set of applications that showcases the most prominent instances of game-theoretic analysis in the field of economics. These applications encompass a wide range of topics, including oligopolistic competition, public goods, coordination failures, bargaining, insurance markets, implementation theory, signaling, and auctions.

The first part of the book focuses on the classical approach to game theory, which is built upon the assumption of players possessing unlimited rationality. This approach lays the foundation for understanding the strategic interactions between agents and the outcomes that result from their choices. However, as the book progresses, it delves into topics that deviate from this paradigm. This shift introduces the study of phenomena where rationality intersects with other factors, such as evolution and social dynamics.

The second part of the book explores these novel and exciting topics, providing a deeper understanding of the complex interplay between rationality and other factors that shape economic behavior. It examines how rational agents can adapt and evolve over time, responding to changing environments and developing new strategies for cooperation and competition. The book also discusses the limitations of rationality and the importance of considering non-rational factors, such as emotions, intuition, and cultural norms, in understanding economic outcomes.

Overall, this textbook offers a comprehensive and accessible introduction to modern game theory and its applications in economics. It provides students with a solid foundation in game-theoretic concepts and tools, enabling them to apply these ideas to real-world situations and gain a deeper understanding of the complex dynamics of economic markets and institutions. Whether you are a student, researcher, or professional interested in economics, this book is an invaluable resource for expanding your knowledge and understanding of game theory.

Weight: 268g
Dimension: 126 x 214 x 23 (mm)
ISBN-13: 9780367171742