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.

The new edition of a widely used introduction to game theory and its applications, with a focus on economics, business, and politics. This widely used introduction to game theory is rigorous but accessible, unique in its balance between the theoretical and the practical, with examples and applications following almost every theory-driven chapter. In recent years, game theory has become an important methodological tool for all fields of social sciences, biology and computer science. This second edition of Strategies and Games not only takes into account new game theoretical concepts and applications such as bargaining and matching, it also provides an array of chapters on game theory applied to the political arena. New examples, case studies, and applications relevant to a wide range of behavioral disciplines are now included. The authors map out alternate pathways through the book for instructors in economics, business, and political science. The book contains four parts: strategic form games, extensive form games, asymmetric information games, and cooperative games and matching. Theoretical topics include dominance solutions, Nash equilibrium, Condorcet paradox, backward induction, subgame perfection, repeated and dynamic games, Bayes-Nash equilibrium, mechanism design, auction theory, signaling, the Shapley value, and stable matchings. Applications and case studies include OPEC, voting, poison pills, Treasury auctions, trade agreements, pork-barrel spending, climate change, bargaining and audience costs, markets for lemons, and school choice. Each chapter includes concept checks and tallies end-of-chapter problems. An appendix offers a thorough discussion of single-agent decision theory, which underpins game theory.

“I am hard pressed to think of another book that can match the combination of practical insights and reading enjoyment.”—Steven Levitt Game theory means rigorous strategic thinking. It’s the art of anticipating your opponent’s next moves, knowing full well that your rival is trying to do the same thing to you. Though parts of game theory involve simple common sense, much is counterintuitive, and it can only be mastered by developing a new way of seeing the world. Using a diverse array of rich case studies—from pop culture, TV, movies, sports, politics, and history—the authors show how nearly every business and personal interaction has a game-theory component to it. Mastering game theory will make you more successful in business and life, and this lively book is the key to that mastery.

Ever wonder why teens can spend entire weekends playing video games but struggle with just one hour of homework? Why we’re addicted to certain websites and steal glances at our smartphones under the dinner table? Or why some people are able to find joy in difficult or repetitive jobs while others burn out? It’s not the experiences themselves but the way they’re structured that matters. All our lives we’ve been told that games are distractions—playful pastimes, but unrelated to success. In Game Frame, Aaron Dignan shows us that the opposite is true: games produce peak learning conditions and accelerated achievement. Here, the crucial connection between the games we love to play and the everyday tasks, goals, and dreams we have trouble realizing is illuminated. Aaron Dignan is the thirty-something founder of a successful digital strategy firm that studies the transformative power of technology in culture. He and his peers were raised on a steady diet of games and gadgets, ultimately priming them to challenge the status quo of the modern workplace. What they learned from games goes deeper than hand-eye coordination; instead, this generation intrinsically understands the value of adding the elements of games into everyday life. Game Frame is the first prescriptive explanation of what games mean to us, the human psychology behind their magnetic pull, and how we can use the lessons they teach as a framework to achieve our potential in business and beyond. Games are a powerful way to influence and change behavior in any setting. Here, Dignan outlines why games and play are such important trends in culture today, and how our technology, from our iPhones to our hybrid cars, primes us to be instinctive players. Game Frame tackles the challenging task of defining games and the mechanics that make games work from several perspectives, then explores these ideas through the lens of neuroscience. Finally, Dignan provides practical tips for using basic game mechanics in a variety of settings, such as motivating employees at work or encouraging children at home, giving readers the tools to develop their own games to solve problems in their everyday lives. Illuminated throughout with a series of real-world examples and hypothetical scenarios, Game Frame promises a crash course in game design and behavioral psychology that will leave the reader—and, by extension, the world itself—more productive. Revolutionary, visionary, practical, and time-tested, Game Frame will change the way you approach life.

This book is an introduction to mathematical game theory, which might better be called the mathematical theory of conflict and cooperation. It is applicable whenever two individuals—or companies, or political parties, or nations—confront situations where the outcome for each depends on the behavior of all. What are the best strategies in such situations? If there are chances of cooperation, with whom should you cooperate, and how should you share the proceeds of cooperation? Since its creation by John von Neumann and Oskar Morgenstern in 1944, game theory has shed new light on business, politics, economics, social psychology, philosophy, and evolutionary biology. In this book, its fundamental ideas are developed with mathematics at the level of high school algebra and applied to many of these fields (see the table of contents). Ideas like “fairness” are presented via axioms that fair allocations should satisfy; thus the reader is introduced to axiomatic thinking as well as to mathematical modeling of actual situations.

This text offers an exceptionally clear presentation of the mathematical theory of games of strategy and its applications to many fields including economics, military, business, and operations research.