A Guide to Game Theory (Paperback)

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Paperback: 304 pages Publisher: Financial Times/ Prentice Hall (28 Oct 2004) Language English Book Description
A Guide to Game Theory explains the important concepts and techniques without using mathematical language or methods.
Using a wide range of examples and applications this book covers decision problems confronted by firms, employers, unions, footballers, partygoers, politicians, governments, non-governmental organisations and communities.
Written for undergraduate students with little or no prior knowledge of game theory. This book supports any game theory module on an economics degree or indeed any course that addresses strategic problem solving.

Synopsis
A Guide to Game Theory explains the important concepts and techniques without using mathematical language or methods. Using a wide range of examples and applications this book covers decision problems confronted by firms, employers, unions, footballers, partygoers, politicians, governments, non-governmental organisations and communities. Written for undergraduate students with little or no prior knowledge of game theory. This book supports any game theory module on an economics degree or indeed any course that addresses strategic problem solving.   contents
Acknowledgements xiv
Publisher‘s acknowledgements xv
CHAPTER 1 Game theory toolbox 1
Introduction 2
1.1 The idea of game theory 3
1.2 Describing strategic games 5
1.3 Simultaneous-move games 7
1.4 Sequential-move or dynamic games 13
1.5 Repetition 16
1.6 Cooperative and non-cooperative games 16
1.7 N-player games 17
1.8 Information 17
Summary 18
Answers to exercises 19
Problems 20
Questions for discussion 20
Notes 20
CHAPTER 2 Moving together 21
Introduction 22
2.1 Dominant-strategy equilibrium 22
2.2 Iterated-dominance equilibrium 29
2.3 Nash equilibrium 36
2.4 Some classic games 43
Summary 50
Answers to exercises 51..
Problems 53
Questions for discussion 54
Answers to problems 55
Notes 56
CHAPTER 3 Prisoners’ dilemma 57
Introduction 58
3.1 Original prisoners’ dilemma game 58
3.2 Generalised prisoners’ dilemma 60
3.3 Prisoners’ dilemma and oligopoly collusion 62
3.4 International trade 64
3.5 Prisoners’ dilemma and public goods 66
3.6 Prisoners’ dilemma and open-access resources 68
3.7 Macroeconomics 70
3.8 Resolving the prisoners’ dilemma 71.
Summary 72
Answers to exercises 73
Problems 74
Questions for discussion 75
Answers to problems 75
Notes 76
CHAPTER 4 Taking turns 79
Introduction 80
4.1 Foreign direct investment game 81.
4.2 Nice–not so nice game 89
4.3 Trespass 93
4.4 Entry deterrence 96
4.5 Centipede games 100
Summary 103
Answers to exercises 104
Problems 105
Questions for discussion 106
Answers to problems 106
Notes 107
CHAPTER 5 Hidden moves and risky choices 109
Introduction 110.
5.1 Hidden moves 110.
5.2 Risk and probabilities 113.
5.3 Limitations of expected utility theory 125
Summary 135
Answers to exercises 136
Problems 137
Questions for discussion 137
Answers to problems 138
Notes 139
CHAPTER 6 Mixing and evolving 141
Introduction 142
6.1 Nash equilibrium in mixed strategies 142
6.2 Evolutionary games 149
Summary 157
Answers to exercises 158
Problems 159
Questions for discussion 160
Answers to problems 161.
Notes 162
CHAPTER 7 Mystery players 163
Introduction 164
7.1 Friends or enemies again 165
7.2 Entry deterrence with incomplete information 170
7.3 Entry deterrence with signalling 173
7.4 Numerical example of entry deterrence with signalling 175
7.5 The beer and quiche signalling game 178
7.6 Asymmetric information for both players in the battle of the sexes 185
Summary 189
Answers to exercises 190
Problems 191.
Questions for discussion 193
Answers to problems 193
Notes 194
CHAPTER 8 Playing again and again . . . 197
Introduction 198.
8.1 Finite repetition 199.
8.2 Infinite and indefinite repetition 203
8.3 Asymmetric information in the finitely repeated prisoners’ dilemma 209
8.4 Resolving the chain store paradox 216.
8.5 Experimental evidence 225
Summary 228
Answers to exercises 229
Problem 231.
Questions for discussion 232
Answer to problem 232
Notes 232
CHAPTER 9 Bargaining and negotiation 235
Introduction 236
9.1 Cooperative and non-cooperative bargaining theory 236
9.2 Bargaining problem 237
9.3 Cooperative bargaining theory 241.
9.4 Non-cooperative, strategic bargaining with alternating offers 249
9.5 Experimental evidence 263
Summary 265
Answers to exercises 266
Problems 267
Questions for discussion 267
Answers to problems 268
Notes 268
Bibliography 271.
Index 279