Game Theory in the Social Sciences. A Reader-Friendly Guide

Individuals, firms, governments and nations behave strategically, for good and bad. Over the last few decades, game theory has been constructed and progressively refined to become the major tool used by social scientists to understand, predict and regulate strategic interaction among agents who often have conflicting interests. In the surprisingly anodyne jargon of the theory, they “play games”. This book offers an introduction to the basic tools of game theory and an overview of a number of applications to real-world cases, covering the areas of economics, politics and international relations. Each chapter is accompanied by some suggestions for further reading. The book begins with an outline of the history of game theory, whose early achievements were driven by the ColdWar. Then, the definitions of games, strategies and solution concepts are illustrated as informally as possible, accompanying each of them with intuitive explanations. The remainder of the book is entirely devoted to lay out examples related to economic issues (technical progress, advertising, cartels, monetary and fiscal policy) and a number of problems related to politics (voting and electoral campaigns) and international relations and international political economy (such as the Cold War, free trade versus protectionism, and openness versus security). The last two chapters deal, respectively, with the role of information and the strategic manipulation thereof, and cooperation and bargaining in games where agents may leave aside their selfish attitude and approach each other in a somewhat different mood. These two chapters also offers appropriate examples. The author has intentionally taken an accessible approach to the subject matter. No particular knowledge of calculus is required to follow the book, and to grasp its message. Therefore, this volume would suit undergraduates and masters’ students in the social sciences without a background in mathematics, as well as anyone interested in understanding relevant phenomena of contemporary economics and politics