Games, Strategies and Decision... | Buy

This new text offers a wealth of diverse, intriguing applications to show where game theory works, where it doesn't, and why. Accessible to all college students, the book conveys the power, appeal, and beauty of game-theoretic logic, emphasizing problem solving over answers. Especially relevant for majors in economics/business and political science/international relations.

Joseph E. Harrington, Jr. is Professor of Economics at Johns Hopkins University. He has served on numerous editorial boards, including the RAND Journal of Economics, Foundations and Trends in Microeconomics, and the Southern Economic Journal. His research has appeared in top journals in a variety of disciplines including economics (e.g., the American Economic Review, Journal of Political Economy, and Games and Economic Behavior), political science (Economics and Politics, Public Choice), sociology (American Journal of Sociology), organizational behavior (Management Science), and psychology (Journal of Mathematical Psychology). He is a co-author of the leading textbook Economics of Regulation and Antitrust, which is currently in its fourth edition.

PART I: LAYING THE FOUNDATIONS

CHAPTER 1: INTRODUCTION TO STRATEGIC REASONING

1.1 Who Wants To Be a Game Theorist?

1.2 A Sampling of Strategic Situations

1.3 Whetting Your Appetite: The Game of Concentration

1.4 Psychological Profile of a Player

1.4.1 Preferences

1.4.2 Beliefs

1.4.3 How Do Players Differ?

1.5 Playing the Gender Pronoun Game

CHAPTER 2: BUILDING A MODEL OF A STRATEGIC SITUATION

2.1 Introduction

2.2 Extensive Form Games: Perfect Information

Baseball

Galileo Galilei and the Inquisition

Haggling at an Auto Dealership

2.3 Extensive Form Games: Imperfect Information

Mugging

U.S. Court of Appeals for the Federal Court

The Iraq War and Weapons of Mass Destruction

2.4 What is a Strategy?

2.5 Strategic Form Games

Tosca

Competition for Elected Office

The Science 84 Game

2.6 Moving from the Extensive Form and Strategic Form

Baseball

Galileo Galilei and the Inquisition

Haggling at an Auto Dealership

2.7 Going from the Strategic Form to the Extensive Form

2.8 Common Knowledge

2.9 A Few More Issues in Modeling Games

PART II: SOLVING STRATEGIC FORM GAMES

CHAPTER 3: ELIMINATING THE IMPOSSIBLE: SOLVING A GAME WHEN RATIONALITY IS COMMON KNOWLEDGE

3.1 Introduction

3.2 Solving a Game When Players Are Rational

3.2.1 Strict Dominance

White Flight and Racial Segregation in Housing

Banning Cigarette Advertising on Television

3.2.2 Weak Dominance

3.2.3 Bidding at an Auction

The Proxy Bid Paradox at eBay

3.3 Solving a Game When Players Are Rational and Players Know Players Are Rational

Team-Project Game

Existence of God Game

Boxed Pigs Game

3.4 Solving a Game When Rationality is Common Knowledge

3.4.1 The Doping Game: Is it Rational for Athletes to Use Steroids?

3.4.2 Iterative Deletion of Strictly Dominated Strategies

3.5 Appendix: Strict and Weak Dominance

3.6 Appendix: Rationalizability (Advanced)

CHAPTER 4: STABLE PLAY: NASH EQUILIBRIA IN DISCRETE GAMES WITH TWO OR THREE PLAYERS

4.1 Defining Nash Equilibrium

4.2 Classic Two-Player Games

Prisoners' Dilemma

A Coordination Game: Driving Conventions

A Game of Coordination and Conflict: Telephone

An Out-guessing Game: Rock-Paper-Scissors

Conflict and Mutual Interest in Games

4.3 Best-Reply Method

4.4 Three-player Games

American Idol Fandom

Voting: Sincere or Devious?

Promotion and Sabotage

4.5 Foundations of Nash Equilibrium

4.5.1 Relationship to Rationality is Common Knowledge

4.5.2 The Definition of a Strategy, Revisited

4.6 Appendix: Nash Equilibrium

CHAPTER 5: STABLE PLAY: NASH EQUILIBRIA IN DISCRETE N-PLAYER GAMES 5.1 Introduction

5.2 Symmetric Games

The Sneetches

Airline Security

Operating Systems: Mac or Windows?

Applying for an Internship

5.3 Asymmetric Games

Entry into a Market

Civil Unrest

5.4 Selecting Among Nash Equilibria

CHAPTER 6: STABLE PLAY: NASH EQUILIBRIA IN CONTINUOUS GAMES

6.1 Introduction

6.2 Solving for Nash Equilibria without Calculus

Price Competition with Identical Products

Neutralizing Price Competition with Price-Matching Guarantees

Competing for Elected Office

6.3 Solving for Nash Equilibria with Calculus (optional)

Price Competition with Differentiated Products

Tragedy of the Commons: Extinction of the Wooly Mammoth

Charitable Giving and the Power of Matching Grants

CHAPTER 7: KEEP 'EM GUESSING: RANDOMIZED STRATEGIES

7.1 Police Patrols and the Drug Trade

7.2 Making Decisions under Uncertainty

7.2.1 Probability and Expectation

7.2.2 Preferences over Uncertain Options

7.2.3 Ordinal vs. Cardinal Payoffs

7.3 Mixed Strategies and Nash Equilibrium

7.3.1 Back on the Beat

7.3.2 Some General Properties of a Nash Equilibrium in Mixed Strategies

7.4 Examples

Avranches Gap in World War II

Entry into a Market

7.5 Advanced Examples

Penalty Kick in Soccer

Slash’em Up: Friday the 13th

Bystander Effect

7.6 Games of Pure Conflict and Cautious Behavior

7.7 Appendix: Formal Description of Nash Equilibrium in Mixed Strategies

PART III: SOLVING EXTENSIVE FORM GAMES

CHAPTER 8: TAKING TURNS: SEQUENTIAL GAMES OF PERFECT INFORMATION 8.1 Introduction

8.2 Backward Induction and Subgame Perfect Equilibrium

8.3 Examples

Cuban Missile Crisis

Enron and Prosecutorial Prerogative

Racial Discrimination and Sports

8.4 Waiting Games: Pre-emption and Attrition

8.4.1 Pre-emption

8.4.2 War of Attrition

8.5 Do People Reason Using Backward Induction?

8.5.1 Experimental Evidence and Backward Induction

8.5.2 A Logical Paradox with Backward Induction

CHAPTER 9: TAKING TURNS IN THE DARK: SEQUENTIAL GAMES OF IMPERFECT INFORMATION

9.1 Introduction

9.2 Subgame Perfect Nash Equilibrium

British Intelligence

9.3 Examples

OS/2

Agenda Control in the Senate

9.4 Commitment

9.4.1 Entry Deterrence

9.4.2 Managerial Contracts and Competition: East India Trade in the 17th Century

PART IV: GAMES OF INCOMPLETE INFORMATION

CHAPTER 10: I KNOW SOMETHING YOU DON'T KNOW: GAMES WITH PRIVATE INFORMATION

10.1 Introduction

10.2 A Game of Incomplete Information: The Munich Agreement

10.3 Bayesian Games and Bayes-Nash Equilibrium

Gunfight in the Wild West

10.4 When All Players Have Private Information: Auctions

Independent Private Values and Shading Your Bid

Common Value and the Winner's Curse

10.5 Voting on Committees and Juries

Strategic Abstention

Sequential Voting in the Jury Room

10.6 Appendix: A More Formal Definition of Bayes-Nash Equilibrium

10.7 Appendix: First Price Sealed Bid Auction with a Continuum of Types

10.7.1 Independent Private Values

10.7.2 Common Value

CHAPTER 11: WHAT YOU DO TELLS ME WHO YOU ARE: SIGNALING GAMES

11.1 Introduction

11.2 Perfect Bayes-Nash Equilibrium

Management Trainee

11.3 Examples

Lemons and the Market for Used Cars

Courtship

Brinkmanship

11.4 Appendix: Bayes’ Rule and Updating Beliefs

CHAPTER 12: LIES AND THE LYING LIARS THAT TELL THEM:

CHEAP TALK GAMES

12.1 Introduction

12.2 Communication in a Game-Theoretic World

12.3 Signaling Information

Defensive Medicine

Stock Recommendations

12.4 Signaling Intentions

12.4.1 Pre-play Communication in Theory

12.4.2 Pre-play communication in Practice

PART V: REPEATED GAMES

CHAPTER 13: PLAYING FOREVER: REPEATED INTERACTION WITH INFINITELY-LIVED PLAYERS

13.1 Trench Warfare in World War I

13.2 Constructing a Repeated Game

13.3 Trench Warfare: Finite Horizon

13.4 Trench Warfare: Infinite Horizon

13.5 Some Experimental Evidence for the Repeated Prisoners’ Dilemma

13.6 Appendix: Present Value of a Payoff Stream

13.7 Appendix: Dynamic Programming

CHAPTER 14: COOPERATION AND REPUTATION: APPLICATIONS OF REPEATED INTERACTION WITH INFINITELY-LIVED PLAYERS

14.1 Introduction

14.2 A Menu of Punishments

14.2.1 Price-Fixing

14.2.2 Temporary Reversion to Moderate Rates

14.2.3 Price Wars: Temporary Reversion to Low Rates

14.2.4 A More Equitable Punishment

14.3 Quid Pro Quo

U.S. Congress and Pork Barrel Spending

Vampire Bats and Reciprocal Altruism

14.4 Reputation

Lending to Kings

Henry Ford and the $5 Workday

14.5 Imperfect Monitoring and Anti-Ballistic Missiles

CHAPTER 15: INTERACTION IN INFINITELY-LIVED INSTITUTIONS

15.1 Introduction

15.2 Cooperation with Overlapping Generations

Tribal Defense

Taking Care of Your Elderly Parents

Political Parties and Lame Duck Presidents

15.3 Cooperation in a Large Population

eBay

Medieval Law Merchant

PART VI: EVOLUTIONARY GAME THEORY AND BIOLOGY

CHAPTER 16: EVOLUTIONARY GAME THEORY AND BIOLOGY: EVOLUTIONARILY STABLE STRATEGIES

16.1 Introducing Evolutionary Game Theory

16.2 Hawk-Dove Conflict

16.3 Evolutionarily Stable Strategy

“Stayin’ Alive” on a Cowpat

16.4 Properties of an ESS

Side-blotched Lizards

16.5 Multi-population Games

Parental Care

16.6 Evolution of Spite

CHAPTER 17: EVOLUTIONARY GAME THEORY AND BIOLOGY: REPLICATOR DYNAMICS

17.1 Introduction

17.2 Replicator Dynamics and Hawk-Dove

17.3 General Definition of the Replicator Dynamic

17.4 ESS and Attractors of the Replicator Dynamic

17.5 Examples of Strategic Situations

Stag Hunt

Handedness in Baseball

Evolution of Cooperation

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