This textbook presents worked-out exercises on game theory with detailed step-by-step explanations. While most textbooks on game theory focus on theoretical results, this book focuses on providing practical examples in which students can learn to systematically apply theoretical solution concepts to different fields of economics and business. The text initially presents games that are required in most courses at the undergraduate level and gradually advances to more challenging games appropriate for masters level courses. The first six chapters cover complete-information games, separately analyzing simultaneous-move and sequential-move games, with applications in industrial economics, law, and regulation. Subsequent chapters dedicate special attention to incomplete information games, such as signaling games, cheap talk games, and equilibrium refinements, emphasizing common steps and including graphical illustrations to focus students’ attention on the most relevant payoff comparisons at each point of the analysis. In addition, exercises are ranked according to their difficulty, with a letter (A-C) next to the exercise number. This allows students to pace their studies and instructors to structure their classes accordingly. By providing detailed worked-out examples, this text gives students at various levels the tools they need to apply the tenets of game theory in many fields of business and economics. This text is appropriate for introductory-to-intermediate courses in game theory at the upper undergraduate and master’s level.

Since the origins in its modern form, due to the seminal works of von Neumann and Nash, Game theory has most often been considered for its applications to economic and social sciences. However, its mathematical roots are more general, and its set of analytical tools that can be used to predict the outcome of interactive decision situations can be very relevant for many other scientific fields, especially including information and industrial engineering, where it has recently become a common curricular subject in university programs. To train the “brain muscles” to solve problems in a game theoretic way, students may find it useful to practice on concrete examples. For this reason, this book presents a collection of exercises that can be suitable for any entry-level course on Game theory. While there is no specific major for which such a practical activity can be useful, the book is conceived with an engineering spirit, and a general regard for modeling and optimization (from technological scenarios to childish gameplay). Still, some useful considerations can also be derived for other fields such as social psychology, biology, or humanities. Rather than in-depth speculative discussions, the book covers mostly practical cases, however providing a preliminary theoretical justification for the solution methods. Covered topics include static games of complete information, zero-sum games and minimax problems, lotteries, sequential games, multistage games, Bayesian games. This may also encourage the reader to approach more advanced topics, with a solid methodological background and a full-rounded appreciation of the subject.

We live in a highly connected world with multiple self-interested agents interacting and myriad opportunities for conflict and cooperation. The goal of game theory is to understand these opportunities. This book presents a rigorous introduction to the mathematics of game theory without losing sight of the joy of the subject. This is done by focusing on theoretical highlights (e.g., at least six Nobel Prize winning results are developed from scratch) and by presenting exciting connections of game theory to other fields such as computer science (algorithmic game theory), economics (auctions and matching markets), social choice (voting theory), biology (signaling and evolutionary stability), and learning theory. Both classical topics, such as zero-sum games, and modern topics, such as sponsored search auctions, are covered. Along the way, beautiful mathematical tools used in game theory are introduced, including convexity, fixed-point theorems, and probabilistic arguments. The book is appropriate for a first course in game theory at either the undergraduate or graduate level, whether in mathematics, economics, computer science, or statistics. The importance of game-theoretic thinking transcends the academic setting—for every action we take, we must consider not only its direct effects, but also how it influences the incentives of others.

This advanced text introduces the principles of noncooperative game theory in a direct and uncomplicated style that will acquaint students with the broad spectrum of the field while highlighting and explaining what they need to know at any given point. This advanced text introduces the principles of noncooperative game theory—including strategic form games, Nash equilibria, subgame perfection, repeated games, and games of incomplete information—in a direct and uncomplicated style that will acquaint students with the broad spectrum of the field while highlighting and explaining what they need to know at any given point. The analytic material is accompanied by many applications, examples, and exercises. The theory of noncooperative games studies the behavior of agents in any situation where each agent's optimal choice may depend on a forecast of the opponents' choices. "Noncooperative" refers to choices that are based on the participant's perceived selfinterest. Although game theory has been applied to many fields, Fudenberg and Tirole focus on the kinds of game theory that have been most useful in the study of economic problems. They also include some applications to political science. The fourteen chapters are grouped in parts that cover static games of complete information, dynamic games of complete information, static games of incomplete information, dynamic games of incomplete information, and advanced topics.

The definitive introduction to game theory This comprehensive textbook introduces readers to the principal ideas and applications of game theory, in a style that combines rigor with accessibility. Steven Tadelis begins with a concise description of rational decision making, and goes on to discuss strategic and extensive form games with complete information, Bayesian games, and extensive form games with imperfect information. He covers a host of topics, including multistage and repeated games, bargaining theory, auctions, rent-seeking games, mechanism design, signaling games, reputation building, and information transmission games. Unlike other books on game theory, this one begins with the idea of rationality and explores its implications for multiperson decision problems through concepts like dominated strategies and rationalizability. Only then does it present the subject of Nash equilibrium and its derivatives. Game Theory is the ideal textbook for advanced undergraduate and beginning graduate students. Throughout, concepts and methods are explained using real-world examples backed by precise analytic material. The book features many important applications to economics and political science, as well as numerous exercises that focus on how to formalize informal situations and then analyze them. Introduces the core ideas and applications of game theory Covers static and dynamic games, with complete and incomplete information Features a variety of examples, applications, and exercises Topics include repeated games, bargaining, auctions, signaling, reputation, and information transmission Ideal for advanced undergraduate and beginning graduate students Complete solutions available to teachers and selected solutions available to students

Praise for the Second Edition: "This is quite a well-done book: very tightly organized, better-than-average exposition, and numerous examples, illustrations, and applications." —Mathematical Reviews of the American Mathematical Society An Introduction to Linear Programming and Game Theory, Third Edition presents a rigorous, yet accessible, introduction to the theoretical concepts and computational techniques of linear programming and game theory. Now with more extensive modeling exercises and detailed integer programming examples, this book uniquely illustrates how mathematics can be used in real-world applications in the social, life, and managerial sciences, providing readers with the opportunity to develop and apply their analytical abilities when solving realistic problems. This Third Edition addresses various new topics and improvements in the field of mathematical programming, and it also presents two software programs, LP Assistant and the Solver add-in for Microsoft Office Excel, for solving linear programming problems. LP Assistant, developed by coauthor Gerard Keough, allows readers to perform the basic steps of the algorithms provided in the book and is freely available via the book's related Web site. The use of the sensitivity analysis report and integer programming algorithm from the Solver add-in for Microsoft Office Excel is introduced so readers can solve the book's linear and integer programming problems. A detailed appendix contains instructions for the use of both applications. Additional features of the Third Edition include: A discussion of sensitivity analysis for the two-variable problem, along with new examples demonstrating integer programming, non-linear programming, and make vs. buy models Revised proofs and a discussion on the relevance and solution of the dual problem A section on developing an example in Data Envelopment Analysis An outline of the proof of John Nash's theorem on the existence of equilibrium strategy pairs for non-cooperative, non-zero-sum games Providing a complete mathematical development of all presented concepts and examples, Introduction to Linear Programming and Game Theory, Third Edition is an ideal text for linear programming and mathematical modeling courses at the upper-undergraduate and graduate levels. It also serves as a valuable reference for professionals who use game theory in business, economics, and management science.

This is a textbook for university juniors, seniors, and graduate students majoring in economics, applied mathematics, and related fields. Each chapter is structured so that a core concept of that chapter is presented with motivations, useful applications are given, and related advanced topics are discussed for future study. Many helpful exercises at various levels are provided at the end of each chapter. Therefore, this book is most suitable for readers who intend to study non-cooperative game theory rigorously for both theoretical studies and applications. Game theory consists of non-cooperative games and cooperative games. This book covers only non-cooperative games, which are major tools used in current economics and related areas. Non-cooperative game theory aims to provide a mathematical prediction of strategic choices by decision makers (players) in situations of conflicting interest. Through the logical analyses of strategic choices, we obtain a better understanding of social (economic, business) problems and possible remedies. The book contains many well-known games such as the prisoner’s dilemma, chicken (hawk–dove) game, coordination game, centipede game, and Cournot, Bertrand, and Stackelberg models in oligopoly. It also covers some advanced frameworks such as repeated games with non-simultaneous moves, repeated games with overlapping generations, global games, and voluntarily separable repeated prisoner’s dilemma, so that readers familiar with basic game theory can expand their knowledge. The author’s own research is reflected in topics such as formulations of information and evolutionary stability, which makes this book unique.