Game Theory: A Very Short Introduction
Games are everywhere: Drivers maneuvering in heavy traffic are playing a driving game. Bargain hunters bidding on eBay are playing an auctioning game. The supermarket's price for corn flakes is decided by playing an economic game. This Very Short Introduction offers a succinct tour of the fascinating world of game theory, a ground-breaking field that analyzes how to play games in a rational way. Ken Binmore, a renowned game theorist, explains the theory in a way that is both entertaining and non-mathematical yet also deeply insightful, revealing how game theory can shed light on everything from social gatherings, to ethical decision-making, to successful card-playing strategies, to calculating the sex ratio among bees. With mini-biographies of many fascinating, and occasionally eccentric, founders of the subject--including John Nash, subject of the movie A Beautiful Mind--this book offers a concise overview of a cutting-edge field that has seen spectacular successes in evolutionary biology and economics, and is beginning to revolutionize other disciplines from psychology to political science.
About the Series: Oxford's Very Short Introductions offers concise and original introductions to a wide range of subjects--from Islam to Sociology, Politics to Classics, and Literary Theory to History. Not simply a textbook of definitions, each volume provides trenchant and provocative--yet always balanced and complete--discussions of the central issues in a given topic. Every Very Short Introduction gives a readable evolution of the subject in question, demonstrating how it has developed and influenced society. Whatever the area of study, whatever the topic that fascinates the reader, the series has a handy and affordable guide that will likely prove indispensable.
out-of-equilibrium play can only make things worse. One only has to look at the long history of failed utopias to see why. Karl Marx is a major culprit. In treating Capital and Labor as monolithic players in a mighty game, he failed to see that the cohesion of a coalition depends on the extent to which it succeeds in satisfying the aspirations of its individual members. The same is true when a whole society is treated as though it were a single individual written large. This isn’t to deny that
petrol, presumably because they have experienced the subgame-perfect equilibrium in the one-shot Trust Minigame too often to be willing to play that game any more. leads us to a subgame off the equilibrium path. If you deviate yourself by trying to evade the cost of punishing a deviant, you will take us to another subgame where it is optimal for some other player to punish you. If he fails to do so, we go to yet another subgame – and so on forever. Game Theory Immanuel Kant naively thought
23 shows that the maximin strategies still look like those in Von Neumann’s model. The chance move that begins the game tree in Figure 24 represents the dealer shufﬂing the deck into one of six equally likely orders. The top card is then dealt to Alice, and the second card to Bob. The rest of the game tree then shows Von Neumann’s betting rules in operation with the new deck of cards. The game tree looks so formidable that you will probably be surprised to ﬁnd that you know everything you need to
agreement set that assign somebody less than their outside option. The status quo needs to be identiﬁed with the payoffs the players receive while negotiating. For example, if Alice and Bob are seeking to negotiate the end of a strike, then their status quo payoffs are their respective incomes during the strike. In order for it to be right to identify the status quo payoffs with the players’ outside options, any breakdown in the negotiations needs be forced rather than voluntary. To model such a
turns out that I was lucky not to have been accused of the even more discreditable petitio principii. But all arguments must obviously either be circular or reduce to an inﬁnite regression if one never stops asking why. Dictionary deﬁnitions are the most familiar example. In games, we can either forever contemplate the inﬁnite regression that begins: Alice thinks that Bob thinks that Alice thinks that Bob thinks . . . or else take refuge in the circularity built into the idea of a Nash