Strategy: An Introduction to Game Theory
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Strategy, Second Edition, is a thorough revision and update of one of the most successful Game Theory texts available.
Prefacexiii1Introduction1Noncooperative Game Theory2Contract and Cooperative Game Theory4The Meaning of "Game"5Part IRepresenting Games72The Extensive Form9Other Examples and Conventions15Exercises193Strategies23Exercises274The Normal Form29Classic Normal-Form Games30Interpretation of the Normal Form32Exercises345Beliefs, Mixed Strategies, and Expected Utility38Exercises40Part IIAnalyzing Behavior in Static Settings436Dominance and Best Response45Dominance45The First Strategic Tension and the Prisoners' Dilemma47The Concept of Efficiency49Best Response50Dominance and Best Response Compared52Exercises557Rationalizability and Iterated Dominance58The Second Strategic Tension61Exercises638Location and Partnership67A Location Game67A Partnership Game: Strategic Complementarities70Exercises769Congruous Strategies and Nash Equilibrium79Congruous Sets81Nash Equilibrium82Equilibrium of the Partnership Game86Coordination and Social Welfare87The Third Strategic Tension89Aside: Behavioral Game Theory90Exercises9210Oligopoly, Tariffs, and Crime and Punishment95Cournot Duopoly Model95Bertrand Duopoly Model97Tariff Setting by Two Countries98A Model of Crime and Police99Exercises10011Mixed-Strategy Nash Equilibrium104Exercises10612Strictly Competitive Games and Security Strategies111Exercises11313Contract, Law, and Enforcement in Static Settings115Complete Contracting in Discretionary Environments119Contracting with Court-Imposed Breach Remedies122Exercises127Part IIIAnalyzing Behavior in Dynamic Settings13114Details of the Extensive Form133Exercises13615Backward Induction and Subgame Perfection137Sequential Rationality and Backward Induction138Subgame Perfection141Exercises14516Topics in Industrial Organization150Advertising and Competition150A Model of Limit Capacity152Dynamic Monopoly155Price Guarantees as a Commitment to High Prices159Exercises16117Parlor Games165Exercises16718Bargaining Problems170Bargaining: Value Creation and Division170An Abstract Representation of Bargaining Problems172An Example174The Standard Bargaining Solution176Exercises17819Analysis of Simple Bargaining Games180Ultimatum Games: Power to the Proposer180Two-Period, Alternating-Offer Games: Power to the Patient182Infinite-Period, Alternating-Offer Game186Exercises18720Games with Joint Decisions; Negotiation Equilibrium191Joint Decisions192Negotiation Equilibrium194Example: Contracting for High-Powered Incentives195Exercises19721Investment, Hold Up, and Ownership201Hold Up Example201Asset Ownership203Exercises20522Repeated Games and Reputation210A Two-Period Repeated Game211An Infinitely Repeated Game216The Equilibrium Payoff Set with Low Discounting219Exercises22323Collusion, Trade Agreements, and Goodwill227Dynamic Oligopoly and Collusion227Enforcing International Trade Agreements229Goodwill and Trading a Reputation230Exercises233Part IVInformation23724Random Events and Incomplete Information239Exercises24325Risk and Incentives in Contracting245Risk Aversion245A Principal-Agent Game249Exercises25426Bayesian Nash Equilibrium and Rationalizability256Exercises25827Trade with Incomplete Information262Markets and Lemons262Auctions264Exercises26928Perfect Bayesian Equilibrium272Conditional Beliefs about Types273Sequential Rationality274Consistency of Beliefs275Equilibrium Definition276Exercises27829Job-Market Signaling and Reputation282Jobs and School282Reputation and Incomplete Information285Exercises288Appendices293AReview of Mathematics295Sets295Functions and Calculus297Probability301BThe Mathematics of Rationalizability307Dominance, Best Response, and Correlated Conjectures307Rationalizability Construction311Exercises313Index315
