The authors are both mathematical economists; one teaches in an economics department and the other in a business school The latter is also editor of a prestigious economics journal and the author of 12 books in pure and applied mathematics. Because of their prestige as scholars and teachers, the National Science Foundation awarded them a grant to develop an interdisciplinary course, combining decision theory and game theory, for primary use in business and economics departments.The heart of business, and much of economics, is decision making. This book is a fully self-contained treatment of almost everything that can be called decision theory, from classical optimization, often covered in courses in mathematical economics and management science, to modern game theory, the cornerstone of modern managerial (micro) economics which provides the foundation for management strategy and competitive analysis. Only a knowledge of simple calculus and probability is required. Although some coverage in later chapters requires extra mathematical knowledge, that knowledge is developed as an integral part of the text. This book will be a key text for all professors who want to take a serious look at a decision theory, whether they are teaching undergraduate game theory or undergraduate or MBA courses in optimization and game theory.With careful selection of topics not to intimidate students, the authors show the integration of decision and game theory, as part of the same body of knowledge and demonstrates that unity. They move from the problem of the decision-maker, to progressively more complex decision problems, such as sequential rationality, culminating in topics of great immediate interest, auctions and bargaining. By building chapters squarely on what goes before, the authors avoid any unnecessary confusion in presenting a technical subject such as game theory, where ideas are often carelessly and callously presented out of proper sequence. The first chapter introduces optimization theory with a single decision-maker, by using problems from finance and business, to demonstrate how to find solutions to optimization problems. Building on concepts of the single decision-maker in the first chapter, Chapter 2 introduces fundamentals of modern game theory by developing the theory of strategic form games and their solutions, e.g. markets, voting auctions. Chapters 4 and 5 on sequential games builds on the foundation of Chapter 3 devoted to sequential decision-making. The concluding chapters (6&7) cover auctions and bargaining using what has preceded in Chapters 1-5.While the book is sound enough mathematically to be used in introductory mathematics courses on game theory, its broadest appeal will be in courses that show applications of decision theory in economics and business (perhaps even some political science courses at the graduate level). It has been successfully class tested in a management science course at the Krannert School of Management. The book shows the increasing importance of sound mathematical knowledge in decision-making for sustained competitive advantage.

This book on game theory introduces and develops the key concepts with a minimum of mathematics. Students are presented with empirical evidence, anecdotes and strategic situations to help them apply theory and gain a genuine insight into human behaviour. The book provides a diverse collection of examples and scenarios from history, literature, sports, crime, theology, war, biology, and everyday life. These examples come with rich context that adds real-world meat to the skeleton of theory. Each chapter begins with a specific strategic situation and is followed with a systematic treatment that gradually builds understanding of the concept.

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

An invaluable study aid for students of game theory Solutions Manual to accompany Game Theory: An Introduction, 2nd Edition provides complete explanations and fully worked solutions for the problems posed in the text. Although designed as a supplement to Game Theory, this solutions guide is versatile enough to act as an independent review of key topics, regardless of which textbook you are using. Each solution includes the original question as well as all given data, and clear, concise language describes the approach and reasoning that yields the correct solution.

A clear, comprehensive introduction to the study of game theory. In the fourth edition, new real-world examples and compelling end-of-chapter exercises engage students with game theory.

Contains complete solutions to odd-numbered problems in text.