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Handbook of Game Theory

Book Description

The ability to understand and predict behavior in strategic situations, in which an individual’s success in making choices depends on the choices of others, has been the domain of game theory since the 1950s. Developing the theories at the heart of game theory has resulted in 8 Nobel Prizes and insights that researchers in many fields continue to develop. In Volume 4, top scholars synthesize and analyze mainstream scholarship on games and economic behavior, providing an updated account of developments in game theory since the 2002 publication of Volume 3, which only covers work through the mid 1990s.



  • Focuses on innovation in games and economic behavior
  • Presents coherent summaries of subjects in game theory
  • Makes details about game theory accessible to scholars in fields outside economics

Table of Contents

  1. Cover image
  2. Title page
  3. Table of Contents
  4. Copyright
  5. Contributors
  6. Preface
    1. Acknowledgments
  7. Introduction to the Series
  8. Chapter 1: Rationality
    1. Abstract
    2. 1.1 Neoclassical Rationality
    3. 1.2 Revealed Preference
    4. 1.3 Decisions Under Risk
    5. 1.4 Bayesian Decision Theory
    6. 1.5 Knowledge
    7. 1.6 Nash Equilibrium
    8. 1.7 Black Boxes
    9. 1.8 Conclusion
    10. Acknowledgments
  9. Chapter 2: Advances in Zero-Sum Dynamic Games
    1. Abstract
    2. 2.1 Introduction
    3. 2.2 Recursive Structure
    4. 2.3 Asymptotic Analysis
    5. 2.4 The Dual Game
    6. 2.5 Uniform Analysis
    7. 2.6 Differential Games
    8. 2.7 Approachability
    9. 2.8 Alternative tools and topics
    10. 2.8.2 The “Limit Game”
    11. 2.8.3 Repeated games and differential equations
    12. 2.8.4 Multimove games
    13. 2.9 Recent Advances
    14. 2.9.2 Markov games with incomplete information on both sides
    15. 2.9.3 Counter examples for the asymptotic approach
    16. 2.9.4 Control problem, martingales, and PDE
    17. 2.9.5 New links between discrete and continuous time games
    18. 2.9.6 Final comments
    19. Acknowledgments
  10. Chapter 3: Games on Networks
    1. Abstract
    2. 3.1 Introduction and Overview
    3. 3.2 Background Definitions
    4. 3.3 Strategic Complements and Strategic Substitutes
    5. 3.4 A Model with Continuous Actions, Quadratic Payoffs, and Strategic Complementarities
    6. 3.5 Network Games with Incomplete Information
    7. 3.6 Choosing Both Actions and Links
    8. 3.7 Repeated Games and Network Structure
    9. 3.8 Concluding Remarks and Further Areas of Research
    10. Acknowledgments
  11. Chapter 4: Reputations in Repeated Games
    1. Abstract
    2. 4.1 Introduction
    3. 4.2 Reputations With Short-Lived Players
    4. 4.2.7 Interpretation
    5. 4.2.8 Exogenously informative signals
    6. 4.3 Reputations with Two Long-Lived Players
    7. 4.4.3 Changing types
    8. 4.5 Discussion
    9. Acknowledgments
  12. Chapter 5: Coalition Formation
    1. Abstract
    2. 5.1 Introduction
    3. 5.2 The Framework
    4. 5.3 The Blocking Approach: Cooperative Games
    5. 5.4 The Bargaining Approach: Noncooperative Games
    6. 5.5 The Welfare Economics of Coalition Formation
    7. 5.6 Coalition Formation: The Road Ahead
    8. Acknowledgments
  13. Chapter 6: Stochastic Evolutionary Game Dynamics
    1. Abstract
    2. 6.1 Evolutionary Dynamics And Equilibrium Selection
    3. 6.2 Equilibrium Selection in 2 × 2 Games
    4. 6.3 Stochastic Stability in Larger Games
    5. 6.4 Bargaining
    6. 6.5 Public Goods
    7. 6.6 Network Games
    8. 6.7 Speed of Convergence
    9. 6.8 Concluding Remarks
  14. Chapter 7: Advances in Auctions
    1. Abstract
    2. 7.1 Introduction
    3. 7.2 First-Price Auctions: Theoretical Advances
    4. 7.3 Multiunit Auctions
    5. 7.4 Dynamic Auctions
    6. 7.5 Externalities in Single-Object Auctions
    7. 7.6 Auctions with Resale
    8. 7.7 All-Pay Auctions
    9. 7.8 Incorporating Behavioral Economics
    10. 7.9 Position Auctions in Internet Search
    11. 7.10 Spectrum Auctions
    12. 7.11 Concluding Remarks
    13. Acknowledgments
  15. Chapter 8: Combinatorial Auctions
    1. Abstract
    2. 8.1 Introduction
    3. 8.2 Supporting Prices
    4. 8.3 Incentives
    5. 8.4 Complexity Considerations
  16. Chapter 9: Algorithmic Mechanism Design: Through the lens of Multiunit auctions
    1. Abstract
    2. 9.1 Introduction
    3. 9.2 Algorithmic Mechanism Design and this Survey
    4. 9.3 Representation
    5. 9.4 Algorithms
    6. 9.5 Payments, Incentives, and Mechanisms
    7. 9.6 Conclusion
    8. Acknowledgments
  17. Chapter 10: Behavioral Game Theory Experiments and Modeling
    1. Abstract
    2. 10.1 Introduction
    3. 10.2 Cognitive Hierarchy and Level-K Models
    4. 10.3 Quantal Response Equilibrium
    5. 10.4 Learning
    6. 10.6 Sociality
    7. 10.7 Conclusion
  18. Chapter 11: Evolutionary Game Theory in Biology
    1. Abstract
    2. 11.1 Strategic Analysis—What Matters to Biologists?
    3. 11.2 Sex Ratios—How the Spirit of Game Theory Emerged in Biology
    4. 11.3 The Empirical Success of Sex-Ratio Theory
    5. 11.4 Animal Fighting and the Official Birth of Evolutionary Game Theory
    6. 11.5 Evolutionary Dynamics
    7. 11.6 Intragenomic Conflict and Willful Passengers
    8. 11.7 Cooperation in Microbes and Higher Organisms
    9. 11.8 Biological Trade and Markets
    10. 11.9 Animal Signaling—Honesty or Deception?
  19. Chapter 12: Epistemic Game Theory
    1. Abstract
    2. 12.1 Introduction and Motivation
    3. 12.2 Main Ingredients
    4. 12.3 Strategic Games of Complete Information
    5. 12.4 Equilibrium Concepts
    6. Acknowledgement
  20. Chapter 13: Population Games and Deterministic Evolutionary Dynamics
    1. Abstract
    2. 13.1 Introduction
    3. 13.2 Population Games
    4. 13.3 Revision Protocols and Mean Dynamics
    5. 13.4 Deterministic Evolutionary Dynamics
    6. 13.5 Families of Evolutionary Dynamics
    7. 13.6 Potential Games
    8. 13.7 ESS and Contractive Games
    9. 13.8 Iterative Solution Concepts, Supermodular Games, and Equilibrium Selection
    10. 13.9 Nonconvergence of Evolutionary Dynamics
    11. 13.10 Connections and Further Developments
    12. Acknowledgements
  21. Chapter 14: The Complexity of Computing Equilibria
    1. Abstract
    2. 14.1 The Task
    3. 14.2 Problems and Algorithms
    4. 14.3 Good Algorithms
    5. 14.4 P and NP
    6. 14.5 Reductions and NP-complete Problems
    7. 14.6 The Complexity of Nash Equilibrium
    8. 14.7 Approximation, Succinctness, and Other Topics
    9. Acknowledgments
  22. Chapter 15: Theory of Combinatorial Games
    1. Abstract
    2. 15.1 Motivation and An Ancient Roman War-Game Strategy
    3. 15.2 The Classical Theory, Sum of Games, Complexity
    4. 15.3 Introducing Draws
    5. 15.4 Adding Interactions Between Tokens
    6. 15.5 Partizan Games
    7. 15.6 Misère Play
    8. 15.7 Constraint Logic
    9. 15.8 Conclusion
    10. Acknowledgment
  23. Chapter 16: Game Theory and Distributed Control**
    1. Abstract
    2. 16.1 Introduction
    3. 16.2 Utility Design
    4. 16.3 Learning Design
    5. 16.4 Exploiting the Engineering Agenda: State-Based Games
    6. 16.5 Concluding Remarks
  24. Chapter 17: Ambiguity and Nonexpected Utility
    1. Abstract
    2. 17.1 Introduction
    3. Part I Nonexpected Utility Theory Under Risk
    4. Part II Nonexpected Utility Theory Under Uncertainty
    5. Acknowledgments
  25. Chapter 18: Calibration and Expert Testing
    1. Abstract
    2. 18.1 Introduction
    3. 18.2 Terminology and Notation
    4. 18.3 Examples
    5. 18.4 Calibration
    6. 18.5 Negative Results
    7. 18.5.2 Prequential Principle
    8. 18.5.3 Interpretations
    9. 18.6 Positive Results
    10. 18.7 Restricting the Class of Allowed Data-Generating Processes
    11. 18.8 Multiple Experts
    12. 18.9 Bayesian and Decision-Theoretic Approaches to Testing Experts
    13. 18.10 Related Topics
    14. Acknowledgment
  26. Index