Tuesday, March 31, 2009

A Short Introduction to Game Theory

I just finished Ken Binmore's Game Theory: A Very Short Introduction from Oxford Press.


I feel that this is a good introductory book for anyone who has no experience with game theory (in reality we all use it all the time. We just don't know it), and want's to get a good first contact that won't scare him off due to the interference of algebra. Game Theory is a deceptivly simple , but powerfull tool for creating and testing for logical consistency theories about almost anything. It's basis is that if we assume some assumptions about the prefrences and context of intercation of some agents, and assume they are acting rationally, we can predict their behaviour. This can then be used to either predict reality, or more often indicate abnormal behaviour requiring expalnation.

Binmore's little book does this very well. He uses almost no math in it but takes the time with clear language to offer a good overview of what game theory is, the most important toy games (like Matching Pennies, Prisoners Dilemma, Give or Take, Stag Hun t e.t.c), the most important findings of game theory (like the Nash Equilibrium). He also looks on the impact of important factors on game theoretic models, like time, convetions, reciprocity, information and looks at some importnat applications of it in auctions, evolutionary biology, and bargaining and coalitions.

All in all a good introduction I feel, either for the curious reader, complete neophyte, or for someone that like me will move on to a more detailed (and scarier) study of game theory. Well worth the time and money.

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