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Cover

An Introduction to Game Theory

Martin J. Osborne

Publication Date - August 2003

ISBN: 9780195128956

560 pages
Hardcover
6-1/8 x 9-1/4 inches

In Stock

Retail Price to Students: $112.95

The subject of this book, game-theoretic reasoning, pervades economic theory and is used widely in other social and behavioral sciences.

Description

Game-theoretic reasoning pervades economic theory and is used widely in other social and behavioral sciences. An Introduction to Game Theory, by Martin J. Osborne, presents the main principles of game theory and shows how they can be used to understand economic, social, political, and biological phenomena. The book introduces in an accessible manner the main ideas behind the theory rather than their mathematical expression. All concepts are defined precisely, and logical reasoning is used throughout. The book requires an understanding of basic mathematics but assumes no specific knowledge of economics, political science, or other social or behavioral sciences.
Coverage includes the fundamental concepts of strategic games, extensive games with perfect information, and coalitional games; the more advanced subjects of Bayesian games and extensive games with imperfect information; and the topics of repeated games, bargaining theory, evolutionary equilibrium, rationalizability, and maxminimization. The book offers a wide variety of illustrations from the social and behavioral sciences and more than 280 exercises. Each topic features examples that highlight theoretical points and illustrations that demonstrate how the theory may be used. Explaining the key concepts of game theory as simply as possible while maintaining complete precision, An Introduction to Game Theory is ideal for undergraduate and introductory graduate courses in game theory.

Reviews

"This is a textbook to be enjoyed both by professors and students, full of clever and often original applications and examples. Serious students who use this text are likely to emerge with a new way of thinking about much of what they see in the real world."--Ted Bergstrom, Professor of Economics, University of California, Santa Barbara

"The book is just superb. I anticipate (based both on my own reading of the book, and comments from colleagues at other institutions) that this will be the standard text for introductory courses in game theory in political science departments for the foreseeable future."--Scott Gehlbach, Assistant Professor of Political Science, University of Wisconsin

"What distinguishes this book from other texts is its remarkable combination of rigor and accessibility. The central concepts of game theory are presented with the mathematical precision suitable for a graduate course, but with an abundance of wide-ranging examples that will give undergraduate students a concrete understanding of what the concepts mean and how they may be used."--Charles A. Wilson, Professor of Economics, New York University

"A great book, by far the best out there in the market in thoroughness and structure."--Dorothea Herreiner, Assistant Professor of Economics, Bowdoin College

"The ideal textbook for applied game theory . . . . It teaches basic game theory from the ground up, using just enough clearly defined technical terminology and ranging from traditional basics to the most modern tools."--Randy Calvert, Professor of Political Science, Washington University in St. Louis

"The approach is intuitive, yet rigorous. Key concepts are explained through a series of examples to guide students through analysis. The examples are then followed by interesting and challenging questions. The main strength is the impressive set of exercises . . . they are extremely well organized and incredibly broad, ranging from easy questions to those for adventurous students."--In-Koo Cho, William Kinkead Distinguished Professor of Economics, University of Illinois

"The gentle pace of the material along with the plethora of examples drawn from economics (mainly) and political science seems to work very well with students."-Branislav L. Slantchev,Assistant Professor of Political Science, University of California, San Diego

"The book is excellent. It is chock full of exercises that are both interesting and applicable to real issues, allowing me great flexibility in focusing on specific examples to illustrate the theory."--Christopher Proulx, Assistant Professor of Economics, University of California, Santa Barbara

"This book provides a simple yet precise introduction into game theory, suitable for the undergraduate level. Author Martin J. Osborne makes use of a wide variety of examples from social and behavioral sciences to convey game-theoretic reasoning. Readers can expect to gain a thorough understanding without any previous knowledge of economics, political science, or any other social or behavioral science. No mathematics is assumed beyond that of basic high school."--Journal of Macroeconomics

Table of Contents

    Preface
    Each chapter ends with notes.
    1. Introduction
    1.1. What is Game Theory?
    1.1.1. An Outline of the History of Game Theory
    1.1.2. John von Neumann
    1.2. The Theory of Rational Choice
    1.3. Coming Attractions: Interacting Decision-Makers
    I. GAMES WITH PERFECT INFORMATION
    2. Nash Equilibrium: Theory
    2.1. Strategic Games
    2.2. Example: The Prisoner's Dilemma
    2.3. Example: Bach or Stravinsky?
    2.4. Example: Matching Pennies
    2.5. Example: The Stag Hunt
    2.6. Nash Equilibrium
    2.6.1. John F. Nash, Jr.
    2.6.2. Studying Nash Equilibrium Experimentally
    2.7. Examples of Nash Equilibrium
    2.7.1. Experimental Evidence on the Prisoner's Dilemma
    2.7.2. Focal Points
    2.8. Best Response Functions
    2.9. Dominated Actions
    2.10. Equilibrium in a Single Population: Symmetric Games and Symmetric Equilibria
    3. Nash Equilibrium: Illustrations
    3.1. Cournot's Model of Oligopoly
    3.2. Bertrand's Model of Oligopoly
    3.2.1. Cournot, Bertrand, and Nash: Some Historical Notes
    3.3. Electoral Competition
    3.4. The War of Attrition
    3.5. Auctions
    3.5.1. Auctions from Babylonia to eBay
    3.6. Accident Law
    4. Mixed Strategy Equilibrium
    4.1. Introduction
    4.1.1. Some Evidence on Expected Payoff Functions
    4.2. Strategic Games in Which Players May Randomize
    4.3. Mixed Strategy Nash Equilibrium
    4.4. Dominated Actions
    4.5. Pure Equilibria When Randomization is Allowed
    4.6. Illustration: Expert Diagnosis
    4.7. Equilibrium in a Single Population
    4.8. Illustration: Reporting a Crime
    4.8.1. Reporting a Crime: Social Psychology and Game Theory
    4.9. The Formation of Players' Beliefs
    4.10. Extension: Finding All Mixed Strategy Nash Equilibria
    4.11. Extension: Games in Which Each Player Has a Continuum of Actions
    4.12. Appendix: Representing Preferences by Expected Payoffs
    5. Extensive Games with Perfect Information: Theory
    5.1. Extensive Games with Perfect Information
    5.2. Strategies and Outcomes
    5.3. Nash Equilibrium
    5.4. Subgame Perfect Equilibrium
    5.5. Finding Subgame Perfect Equilibria of Finite Horizon Games: Backward Induction
    5.5.1. Ticktacktoe, Chess, and Related Games
    6. Extensive Games With Perfect Information: Illustrations
    6.1. The Ultimatum Game, the Holdup Game, and Agenda Control
    6.1.1. Experiments on the Ultimatum Game
    6.2. Stackelberg's Model of Duopoly
    6.3. Buying Votes
    6.4. A Race
    7. Extensive Games With Perfect Information: Extensions and Discussion
    7.1. Allowing for Simultaneous Moves
    7.1.1. More Experimental Evidence on Subgame Perfect Equilibrium
    7.2. Illustration: Entry into a Monopolized Industry
    7.3. Illustration: Electoral Competition with Strategic Voters
    7.4. Illustration: Committee Decision-Making
    7.5. Illustration: Exit from a Declining Industry
    7.6. Allowing for Exogenous Uncertainty
    7.7. Discussion: Subgame Perfect Equilibrium and Backward Induction
    7.7.1. Experimental Evidence on the Centipede Game
    8. Coalitional Games and the Core
    8.1. Coalitional Games
    8.2. The Core
    8.3. Illustration: Ownership and the Distribution of Wealth
    8.4. Illustration: Exchanging Homogeneous Horses
    8.5. Illustration: Exchanging Heterogeneous Houses
    8.6. Illustration: Voting
    8.7. Illustration: Matching
    8.7.1. Matching Doctors with Hospitals
    8.8. Discussion: Other Solution Concepts
    II. GAMES WITH IMPERFECT INFORMATION
    9.1. Motivational Examples
    9.2. General Definitions
    9.3. Two Examples Concerning Information
    9.4. Illustration: Cournot's Duopoly Game with Imperfect Information
    9.5. Illustration: Providing a Public Good
    9.6. Illustration: Auctions
    9.6.1. Auctions of the Radio Spectrum
    9.7. Illustration: Juries
    9.8. Appendix: Auctions with an Arbitrary Distribution of Valuations
    10. Extensive Games with Imperfect Information
    10.1. Extensive Games with Imperfect Information
    10.2. Strategies
    10.3. Nash Equilibrium
    10.4. Beliefs and Sequential Equilibrium
    10.5. Signaling Games.
    10.6. Illustration: Conspicuous Expenditure as a Signal of Quality
    10.7. Illustration: Education as a Signal Of Ability
    10.8. Illustration: Strategic Information Transmission
    10.9. Illustration: Agenda Control with Imperfect Information
    III. VARIANTS AND EXTENSIONS
    11. Strictly Competitive Games and Maxminimization
    11.1. Maxminimization
    11.2. Maxminimization and Nash Equilibrium
    11.3. Strictly Competitive Games
    11.4. Maxminimization and Nash Equilibrium in Strictly Competitive Games
    11.4.1. Maxminimization: Some History
    11.4.2. Empirical Tests: Experiments, Tennis, and Soccer
    12. Rationalizability
    12.1. Rationalizability
    12.2. Iterated Elimination of Strictly Dominated Actions
    12.3. Iterated Elimination of Weakly Dominated Actions
    12.4. Dominance Solvability
    13. Evolutionary Equilibrium
    13.1. Monomorphic Pure Strategy Equilibrium
    13.1.1. Evolutionary Game Theory: Some History
    13.2. Mixed Strategies and Polymorphic Equilibrium
    13.3. Asymmetric Contests
    13.3.1. Side-blotched lizards
    13.3.2. Explaining the Outcomes of Contests in Nature
    13.4. Variation on a Theme: Sibling Behavior
    13.5. Variation on a Theme: The Nesting Behavior of Wasps
    13.6. Variation on a Theme: The Evolution of the Sex Ratio
    14. Repeated Games: The Prisoner's Dilemma
    14.1. The Main Idea
    14.2. Preferences
    14.3. Repeated Games
    14.4. Finitely Repeated Prisoner's Dilemma
    14.5. Infinitely Repeated Prisoner's Dilemma
    14.6. Strategies in an Infinitely Repeated Prisoner's Dilemma
    14.7. Some Nash Equilibria of an Infinitely Repeated Prisoner's Dilemma
    14.8. Nash Equilibrium Payoffs of an Infinitely Repeated Prisoner's Dilemma
    14.8.1. Experimental Evidence
    14.9. Subgame Perfect Equilibria and the One-Deviation Property
    14.9.1. Axelrod's Tournaments
    14.10. Some Subgame Perfect Equilibria of an Infinitely Repeated Prisoner's Dilemma
    14.10.1. Reciprocal Altruism Among Sticklebacks
    14.11. Subgame Perfect Equilibrium Payoffs of an Infinitely Repeated Prisoner's Dilemma
    14.11.1. Medieval Trade Fairs
    14.12. Concluding Remarks
    15. Repeated Games: General Results
    15.1. Nash Equilibria of General Infinitely Repeated Games
    15.2. Subgame Perfect Equilibria of General Infinitely Repeated Games
    15.3. Finitely Repeated Games
    15.4. Variation on a Theme: Imperfect Observability
    16. Bargaining
    16.1. Bargaining as an Extensive Game
    16.2. Illustration: Trade in a Market
    16.3. Nash's Axiomatic Model
    16.4. Relation Between Strategic and Axiomatic Models
    17. Appendix: Mathematics
    17.1. Numbers
    17.2. Sets
    17.3. Functions
    17.4. Profiles
    17.5. Sequences
    17.6. Probability
    17.7. Proofs