Game Theory for Applied Economists (英語) ペーパーバック – 1992/8/2
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This book introduces one of the most powerful tools of modern economics to a wide audience: those who will later construct or consume game-theoretic models. Robert Gibbons addresses scholars in applied fields within economics who want a serious and thorough discussion of game theory but who may have found other works overly abstract. Gibbons emphasizes the economic applications of the theory at least as much as the pure theory itself; formal arguments about abstract games play a minor role. The applications illustrate the process of model building-of translating an informal description of a multi-person decision situation into a formal game-theoretic problem to be analyzed. Also, the variety of applications shows that similar issues arise in different areas of economics, and that the same game-theoretic tools can be applied in each setting. In order to emphasize the broad potential scope of the theory, conventional applications from industrial organization have been largely replaced by applications from labor, macro, and other applied fields in economics. The book covers four classes of games, and four corresponding notions of equilibrium: static games of complete information and Nash equilibrium, dynamic games of complete information and subgame-perfect Nash equilibrium, static games of incomplete information and Bayesian Nash equilibrium, and dynamic games of incomplete information and perfect Bayesian equilibrium.
Lucid and detailed introduction to game theory in an explicitly economic context.--Cooperative Economic News Service
The book starts out with analyzing game theories most famous candidate of how pareto inferior outcomes can arise naturally, the prisoner's dilemma. The author describes the analysis and brings in ideas formalizing strictly dominated strategies and subsequently iterated elimination of strictly dominated strategies. The author brings introduces ideas like strategy space, common knowledge, payoff profiles and Nash equilibrium. The author then goes on to reintroduce elementary microeconomic situations like the duopoly and how to solve such games using a game theory lens. The author introduces mixed strategies as well and gives an overview of fixed point ideas associated with the proof of an existence of a Nash equilibrium with mixed strategies. The author then gets into dynamic games and backwards induction techniques. The use of subgame solutions to get to overall game solutions is discussed and the author discusses Nash equilibriums with discounting payoffs. The author uses examples of bank runs and wage bargaining to reinforce the practical economic situations which game theory can be used as a tool to analyze. The author then gets into static games of incomplete information and starts to bring in Bayesian ideas and expectations of utility over a probability space. The subject matter is approachable but the lack of formal definitions earlier in the book starts to makes the introduction of new ideas slightly more cumbersome. The author brings up some ideas from auctions to help the reader understand decision making under uncertainty. I don't love the treatment as I think it would be better to first describe mechanism design for auctions that eliminate the need for Bayesian logic and then introduce the Bayesian game (ie Vickrey auction mechanism to start vs traditional auction mechanism to then analyze). The author then gets into multi-period games of incomplete information including the job market where worker production is noisy and monetary policy with adaptive inflation expectations. The treatment gives the reader a lot of concrete examples to think about modeling under uncertainty; the natural state of the world.
Game theory for applied economists is a very readable introduction to game theory. For a reader looking for examples of how to use game theory this book is good, for a reader trying to trying to understand formal game theory better it is not as good. The use of economic examples is prioritized which is definitely useful for building intuition but it has its drawbacks for a reader moving on to read other literature where the reader will likely find themselves unprepared. Definitely recommend the book for someone looking for a quick practical introduction to the subject but for further study the book needs to be supplemented.
I would recommend this for Econ majors (such as myself) or those with a particular penchant for Game Theory.