Holler / Klose-Ullmann Scissors and Rock

Game Theory for Those Who Manage
1. Auflage 2020
ISBN: 978-3-030-44823-3
Verlag: Springer International Publishing
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 268 Seiten, eBook

This book introduces readers to basic game theory as a tool to deal with strategic decision problems, helping them to understand the complexity of such problems - to extract a solution, if possible - and to manage the complexity by revising the game if appropriate. The authors discuss basic decision situations modeled as Prisoners' Dilemma, Chicken Game, and Stag Hunt Game, as well as concepts like the Nash equilibrium, Trembling Hand Perfectness, Rationalizable Strategies and the Theory of Moves to introduce game theoretic thinking. Further, the book presents pioneers of strategic thinking, e.g., Sun Tzu, Machiavelli, Adam Smith, and Goethe, and includes cases of conflict and cooperation to illustrate practical applications. Readers learn to apply game theory in business and in daily life - to manage their decision problems and to better understand the decision problems of others.


Manfred J. Holler is an Emeritus Professor of Economics at the University of Hamburg (Germany). He is the founding editor of, and managed the respected European Journal of Political Economy (1985-1993), and Homo Oeconomicus (1983-2015). He currently serves as an assessing editor or board member for several journals, such as The Journal of Mind and Behavior, Control and Cybernetics, the European Journal of Law and Economics, and Games. He is one of the Editors-in-Chief of Homo Oeconomicus.  Barbara Klose-Ullmann holds a PhD. in Economics and worked for more than 25 years as a manager at a major German bank, where she participated in the bargaining for licenses in Eastern Europe. She has published a series of articles applying game theory to the analysis of strategic interaction in history, myths, and theatre plays, and authored books on health, in economic history of economics, and on game theory (co-authored with Manfred J. Holler).

Zielgruppe

Professional/practitioner

Autoren/Hrsg.

Holler, Manfred J.

Klose-Ullmann, Barbara

Inhaltsverzeichnis

1;Preface: Introduction and Warnings;5
2;Contents;10
3;1 Playing for Susan;14
3.1;1.1Thinking Strategically;15
3.2;1.2Why not Learn Game Theory?;17
3.3;1.3The Working of the Invisible Hand;19
3.4;1.4The Real World and Its Models;23
3.5;1.5Winner-Takes-It-All and the Chicken Game;25
3.6;1.6The Essence of Game Theory, the Brain, and Empathy;28
3.7;1.7Strategic Thinking that Failed—Perhaps;31
3.8;References;33
4;2 No Mathematics;35
4.1;2.1Historical Note I: The Pioneers;35
4.2;2.2The Concept of Sets;39
4.3;2.3Prices and Quantities;42
4.4;2.4From Set to Mapping and Function;43
4.5;2.5Utilities, Payoff Functions, and Strategy Vectors;45
4.6;2.6Monkeys Write Shakespeare, but Where Is Hamlet?;47
4.7;References;50
5;3 The Prisoners’ Dilemma, but Who Are the Players?;51
5.1;3.1From Game Form to Payoff Matrix;51
5.2;3.2Equilibrium in Dominant Strategies;56
5.3;3.3Catch-22 and Other Social Traps;57
5.4;3.4Ways Out of the Dilemma;59
5.5;3.5Who Are the Players?;61
5.6;3.6Then Strike;64
5.7;3.7Tosca’s Dominant Strategy;67
5.8;References;69
6;4 The Nash Equilibrium;70
6.1;4.1On the Definition of the Nash Equilibrium;70
6.2;4.2Historical Note II: Nash and the Nash Equilibrium;73
6.3;4.3Nash Equilibria and Chicken Game;74
6.4;4.4Inefficient Equilibria in the QWERTY-DSK Game;78
6.5;4.5Who Are the Players in the QWERTY-DSK Game?;81
6.6;4.6Nash Equilibria in Kamasutra Games;83
6.7;References;84
7;5 Sequence of Moves and the Extensive Form;86
7.1;5.1The Shrinking of the Event Matrix;86
7.2;5.2Sequential Structure and Chicken Game;87
7.3;5.3Extensive Form and Game Tree;89
7.4;5.4Information: Perfect, Imperfect, Complete, and Incomplete;90
7.5;5.5Perfect Recall Missing;93
7.6;5.6The Battle of the Sexes;97
7.7;5.7What Is a Strategy?;100
7.8;5.8Sharing a Cake;102
7.9;5.9Theory of Moves;103
7.10;References;106
8;6 Chaos, Too Many and Too Few;107
8.1;6.1The El Farol Problem or “Too Many People at the Same Spot”;108
8.2;6.2Self-referential Systems;110
8.3;6.3Solutions to the El Farol Problem;111
8.4;6.4Market Congestion Game;113
8.5;6.5Viruses for Macintosh;114
8.6;6.6The Volunteer’s Dilemma;116
8.7;References;122
9;7 Which Strategy to Choose?;123
9.1;7.1Nash Equilibrium and Optimal Strategy;124
9.2;7.2Equilibrium Choice and Trembling Hand;126
9.3;7.3Trembling Hand Perfection and Market Congestion;128
9.4;7.4Rationalizable Strategies;131
9.5;References;133
10;8 Step-by-Step: The Subgame-Perfect Equilibrium;134
10.1;8.1Market Entry Game with Monopoly;135
10.2;8.2Backward Induction and Optimal Strategies;136
10.3;8.3The Ultimatum Game;139
10.4;8.4Social Trust and the Stag Hunt Game;142
10.5;8.5How Reciprocity Works;145
10.6;References;148
11;9 Forever and a Day;150
11.1;9.1The Competition Trap Closes;152
11.2;9.2Iterated Prisoners’ Dilemma and the “Ravages of Time”;154
11.3;9.3The Competition Trap Breaking Down;157
11.4;9.4Robert Axelrod’s “Tournament of Strategies”;161
11.5;9.5“The True Egoist Cooperates.”—Yes, but Why?;164
11.6;9.6The Folk Theorem and “What We Have Always Known”;167
11.7;References;172
12;10 Mixed Strategies and Expected Utility;174
12.1;10.1From Lottery to Expected Utility;175
12.2;10.2The Allais Paradox and Kahneman-Tversky;178
12.3;10.3Optimal Inspection in Mixed Strategies;181
12.4;10.4Maximin Solution and the Inspection Game;185
12.5;10.5Chicken Game Equilibria and Maximin Solution;188
12.6;10.6Miller’s Crucible and the Stag Hunt Game;189
12.7;10.7Zero-Sum Games and Minimax Theorem;192
12.8;10.8The Goalie’s Anxiety at the Penalty Kick;197
12.9;10.9Scissors and Rock;200
12.10;References;202
13;11 More Than Two Players;204
13.1;11.1The Value of Coalitions;205
13.2;11.2The Core;206
13.3;11.3Network Games;208
13.4;11.4Epilogue to the Core and Other Bargaining Solutions;213
13.5;11.5Competition and Cooperation in the Triad;216
13.6;References;220
14;12 Bargaining and Bargaining Games;221
14.1;12.1The Bargaining Problem and the Solution;222
14.2;12.2Rubinstein Game and the Shrinking Pie;227
14.3;12.3Binding Agreements and the Nash Solution;233
14.4;12.4Properties, Extensions, and the Nash Program;239
14.5;References;244
15;13 Goethe’s Price Games, Auctions, and Other Surprises;245
15.1;13.1The Story of a Second-Price Auction;246
15.2;13.2The Price-Setting Goethe;250
15.3;13.3Optimal Strategies in Auctions and the Revenue Equivalence Theorem;253
15.4;13.4All-Pay Auction, Attrition, and Pyrrhic Victory;258
15.5;13.5Who Likes to Pay High Prices?;260
15.6;References;262
16;Index;263

Playing for Susan.- No Mathematics.- The Prisoners' Dilemma, but Who Are the Players?.- The Nash Equilibrium.- Sequence of Moves and the Extensive Form.- Chaos, Too Many and Too Few.- Which Strategy to Choose?.- Step-by-step: The Subgame Perfect Equilibrium.- Forever and a Day.- Mixed Strategies and Expected Utility.- More than Two Players.- Bargaining and Bargaining Games.- Goethe's Price Games, Auctions, and Other Surprises.

Über Autor(innen)

Manfred J. Holler  is an Emeritus Professor of Economics at the University of Hamburg (Germany). He is the founding editor of, and managed the respected European Journal of Political Economy  (1985-1993), and Homo Oeconomicus  (1983-2015). He currently serves as an assessing editor or board member for several journals, such as  The Journal of Mind and Behavior , Control and Cybernetics , the European Journal of Law and Economics , and  Games . He is one of the Editors-in-Chief of Homo Oeconomicus.  Barbara Klose-Ullmann  holds a PhD. in Economics and worked for more than 25 years as a manager at a major German bank, where she participated in the bargaining for licenses in Eastern Europe. She has published a series of articles applying game theory to the analysis of strategic interaction in history, myths, and theatre plays, and authored books on health, in economic history of economics,and on game theory (co-authored with Manfred J. Holler).