Game Theory for Applied Economists

by Robert Gibbons

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.

Genres: Economics, Nonfiction, Business, Mathematics, Textbooks, Reference, Psychology

288 pages, Paperback

First published January 1, 1992

About the author

Robert S. Gibbons is an American economist and Sloan Distinguished Professor of Management at MIT. He specializes in organizational economics and founded the NBER Working Group on Organizational Economics, which he directed from 2002 to 2022.

Reviews

[Dio Mavroyannis · Rating 5 out of 5]

Not the most technical book but that is a good thing. It gets most of the concept out very clearly, you can follow along all the way through, I would even say that if you can get to the end and understand every definition of it, you are probably better equipped in game theory than most economists. Unfortunately because the simplicity in approach, going from this textbook to notation heavy one will not be easy but that does not make this one any less enjoyable. Probably the most fun game theory book out there.

[Colin · Rating 4 out of 5]

"The argument is in the spirit of our analysis of the two-stage repeated game based on Figure 2.3.3 (the stage game in which we added a second Nash equilibrium to the Prisoners' Dilemma): if if the players cooperate today then they play a high-payoff equilibrium tomorrow; otherwise they play a low-payoff equilibrium tomorrow. The difference between the two-stage repeated game and the infinitely repeated game is that here the high-payoff equilibrium that might be played tomorrow is not artificially added to the stage game but rather represents continuing to cooperate tomorrow and thereafter."

I give you Gibbons, the Woodrow Wilson of mathematics.

[Yan Leng · Rating 5 out of 5]

A book definitely worth second-reading. This is a book used as reference for many MIT graduate level applied game theory classes (at least three departments are using is that I knew of). I like the way the book is organized and the illustrative

Easier than Fudenberg's intro to game theory. I would recommend this as an intro book for people new to game theory.

[Jack · Rating 3 out of 5]

Very good textbook. Concise when it needs to be, wordy when it needs to be, and uses very good metaphors and examples. Very well organized.

[ریچارد · Rating 3 out of 5]

کتابه دیگه ای نخوندم تو این حوزه، اما اگر وولدریج رو استاندارد قضیه بدونیم، سه ستاره

[Tyler · Rating 4 out of 5]

Excellent, concise introduction to applied game theory. The examples draw from a variety of applications within economics, but primarily focus on industrial organization. Concepts are introduced in an intuitive manner before being formally defined and overtly technical aspects are avoided. Highly recommended to advanced undergraduate students or higher who need to know how to apply non-cooperative game theory without needing to know how every theorem is derived.

[Daniel Villegas · Rating 5 out of 5]

This is a classic in Theory of Games as part of the baggage any economist must have in his understanding about how the markets solve problems when there're market power to exert to improve profits. Duopoly an Oligopoly are solved as games. The complete isuue must cover Bayessian solutions and multi-step games.

Gibbons is one of the most complete texts currently used at Universities.

[Scott · Rating 4 out of 5]

Good book on game theory. Clear examples and text.

[Cortney R · Rating 3 out of 5]

This is a nice resource for anyone interested in game theory. It goes through nice intuitive explanations of theory and application with a less rigor than other books on the subject.

[Justin · Rating 4 out of 5]

Good, concise, nice reference without a lot of filler. Not necessarily a good place for beginners.

[Tista Kundu]

yet to solve

[Safeya Zeitoun · Rating 4 out of 5]

The concepts are explained nicely in laymen's terms. As someone who was never exposed to game theory before in the past, I found this text very helpful.

[Pablo · Rating 5 out of 5]

Lifesaver