Cover image for Games and decision making
Games and decision making
Aliprantis, Charalambos D.
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Publication Information:
New York : Oxford University Press, 2000.
Physical Description:
xi, 257 pages : illustrations ; 25 cm
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Central Library QA269 .A44 2000 Adult Non-Fiction Central Closed Stacks

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Games and Decision Making is a self-contained introduction to basic issues and techniques of modern decision theory. From classical optimization to modern game theory, the authors show the increasing importance of mathematical knowledge for sustained competitive advantage in decision making.Students need only a basic understanding of elementary calculus and probability to use the book effectively. Through an imaginative selection of topics, the authors treat decision and game theory as part of one body of knowledge. They move from problems involving the individual decision-maker to progressively more complex problems such as sequential rationality, auctions, and bargaining. By building eachchapter on material presented earlier, the authors avoid unnecessary confusion. The first chapter introduces optimization theory with a single decision-maker by using problems from finance and management to illustrate optimization techniques. Chapter two introduces the fundamentals of game theory by developing the theory of strategic form games and their solutions. The authorsalso present applications from a variety of sources including markets, voting, auctions, and resource extraction. Chapter three is devoted to sequential decision making, followed by two chapters on sequential games. The final chapters cover auctions and bargaining. Successfully class tested in a management science course at the Krannert School of Management, Games and Decision Making is an essential text for professors who need to have their students take a serious look at decision theory, whether at the undergraduate or masters level.

Author Notes

Charalambos Aliprantis is at Purdue University. Subir Kumar Chakrabarti is at Indiana University, Purdue University, Indianapolis.

Table of Contents

1 Choices
1.1 Functions
1.2 The optimization problem
1.3 First order conditions
1.4 Optimizing uisng the Lagrange method
1.5 Uncertainty and chance
1.6 Decision making under uncertainty
2 Decision and Games
2.1 Two-person matrix games
2.2 Strategic form games
2.3 Applications
2.4 Solving matrix games with mixed strategies
3 Sequential Decisions
3.1 Graphs and trees
3.2 Single-person decisions
3.3 Uncertainty and single-person decisions
4 Sequential Games
4.1 The structure of sequential games
4.2 Sequential games with perfect information
4.3 Sequential games with imperfect information
5 Sequential Rationality
5.1 The market for lemons
5.2 Beliefs and strategies
5.3 Consistency of beliefs
5.4 Expected payoff
5.5 Sequential equilibrium
5.6 Applications: signaling games
6 Auctions
6.1 Auctions with complete information
6.2 Individual private value auctions
6.3 English auctions
6.4 Common-value auctions
7 Bargaining
7.1 The Nash solution
7.2 Monotonicity in bargaining
7.3 The core of a bargaining game
7.4 Allocation Rules: The Shapley Value
7.5 Two-Person Sequential Bargaining

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