Games and Decision Making

The book blends together game theory and decision theory and presents the central topics of game theory in a clear and rigorous manner. Numerous applications from economics and other disciplines is used to illustrate the theory. The first chapter is an introduction to single person decision problems which is followed by the chapter on strategic form games (normal form games) with both complete and incomplete information. Among the applications of strategic form games are the Cournot model, the Bertrand model, the Hotelling model and the resource extraction game. This is followed by a chapter on single-person sequential decision problems. The book then moves on to the topic of sequential games (extensive form games) and the concept of sub-game perfect equilibrium. The chapters that follow these are on auctions and bargaining, including both axiomatic and non-cooperative theories of bargaining. There is then a full chapter on repeated games. The penultimate chapter is on sequential games with imperfect information and on equilibrium concepts like sequential equilibrium and Bayesian perfect equilibrium. The final chapter is a summary of the existence results of the various equilibrium concepts and provides detailed proofs of these results. All the chapters include several applications of the concepts discussed in the chapter.

The late Charalambos D. Aliprantis was distinguished Professor at the Krannert School of Management at Purdue University. During a career that spanned almost forty years, he published more than one hundred articles in the major journals in economic theory and mathematics and authored half a dozen books on economic theory and mathematics.

Subir K. Chakrabarti is Professor in the Department of Economics at Indiana University and Purdue University at Indianapolis. He has written more than twenty publications, with articles in journals such as Econometrica, Journal of Economic Theory, Journal of Mathematical Economics, International Economic Review, and Journal of Public Economics.