Description Written in a crisp and approachable style, Games and Information uses simple modeling techniques and straightforward explanations to provide students with an understanding of game theory and information economics. **Written for introductory courses seeking a little rigor. **The 4th edition brings the material fully up-to-date and includes new end-of-chapter problems and classroom projects, as well as a math appendix. **Accompanied by a comprehensive website featuring solutions to problems and teaching notes. Table of Contents List of Figures List of Tables List of Games Preface Contents and Purpose Changes in the Second Edition (1994) Changes in the Third Edition (2001) Changes in the Fourth Edition (2006) Using the Book The Level of Mathematics Other Books Contact Information Acknowledgements Introduction History Game Theory's Method Exemplifying Theory This Book's Style Notes PART 1: GAME THEORY 1. The Rules of the Game Definitions Dominated and Dominant Strategies: The Prisoner's Dilemma Iterated Dominance: The Battle of the Bismarck Sea Nash Equilibrium: Boxed Pigs, The Battle of the Sexes and Ranked Coordination Focal Points Notes Problems Classroom Game 2. Information The Strategic and Extensive Forms of a Game Information Sets Perfect, Certain, Symmetric, and Complete Information The Harsanyi Transformation and Bayesian Games Example: The Png Settlement Game Notes Problems Classroom Game 3. Mixed and Continuous Strategies Mixed Strategies: The Welfare Game The Payoff-equating Method and Games of Timing Mixed Strategies with General Parameters and N Players: The Civic Duty Game Randomizing is not Always Mixing: The Auditing Game Continuous Strategies: The Cournot Game Continuous Strategies: The Bertrand Game, Strategic Complements, and Strategic Substitutes Existence of Equilibrium Notes Problems Classroom Game 4. Dynamic Games with Symmetric Information Subgame Perfectness An Example of Perfectness: Entry Deterrence I Credible Threats, Sunk Costs, and the Open-Set Problem in the Game of Nuisance Suits Recoordination to Pareto-dominant Equilibria in Subgames: Pareto Perfection Notes Problems Classroom Game 5. Reputation and Repeated Games with Symmetric Information Finitely Repeated Games and the Chainstore Paradox Infinitely Repeated Games, Minimax Punishments, and the Folk Theorem Reputation: The One-sided Prisoner's Dilemma Product Quality in an Infinitely Repeated Game Markov Equilibria and Overlapping Generations: Customer Switching Costs Evolutionary Equilibrium: The Hawk-Dove Game Notes Problems Classroom Game 6. Dynamic Games with Incomplete Information Perfect Bayesian Equilibrium: Entry Deterrence II and III Refining Perfect Bayesian Equilibrium in the Entry Deterrence and PhD Admissions Games The Importance of Common Knowledge: Entry Deterrence IV and V Incomplete Information in the Repeated Prisoner's Dilemma: The Gang of Four Model The Axelrod Tournament Credit and the Age of the Firm: The Diamond Model Notes Problems Classroom Game PART 2: ASYMMETRIC INFORMATION 7. Moral Hazard: Hidden Actions Categories of Asymmetric Information Models A Principal-agent Model: The Production Game The Incentive Compatibility and Participation Constraints Optimal Contracts: The Broadway Game Notes Problems Classroom Game 8. Further Topics in Moral Hazard Efficiency Wages Tournaments Institutions and Agency Problems Renegotiation: The Repossession Game State-space Diagrams: Insurance Games I and II Joint Production by Many Agents: The Holmstrom Teams Model The Multitask Agency Problem Notes Problems Classroom Game 9. Adverse Selection Introduction: Production Game VI Adverse Selection under Certainty: Lemons I and II Heterogeneous Tastes: Lemons III and IV Adverse Selection under Uncertainty: Insurance Game III Market Microstructure A Variety of Applications Adverse Selection and Moral Hazard Combined: Production Game VII Notes Problems Classroom Game 10. Mechanism Design and Postcontractual Hidden Knowledge Mechanisms, Unravelling, Cross Checking, and the Revelation Principle Myerson Mechanism Design An Example of Postcontractual Hidden Knowledge: The Salesman Game The Groves Mechanism Price Discrimination Rate-of-return Regulation and Government Procurement Notes Problems Classroom Game 11. Signalling The Informed Player Moves First: Signalling Variants on the Signalling Model of Education General Comments on Signalling in Education The Informed Player Moves Second: Screening Two Signals: The Game of Underpricing New Stock Issues Signal Jamming and Limit Pricing Countersignalling Notes Problems Classroom Game PART 3: APPLICATIONS 12. Bargaining The Basic Bargaining Problem: Splitting a Pie The Nash Bargaining Solution Alternating Offers over Finite Time Alternating Offers over Infinite Time Incomplete Information Setting Up a Way to Bargain: The Myerson-Satterthwaite Mechanism Notes Problems Classroom Game 13. Auctions Values Private and Common, Continuous and Discrete Optimal Strategies under Different Rules in Private-value Auctions Revenue Equivalence, Risk Aversion, and Uncertainty Reserve Prices and the Marginal Revenue Approach Common-value Auctions and the Winner's Curse Asymmetric Equilibria, Affiliation, and Linkage: The Wallet Game Notes Problems Classroom Game 14. Pricing Quantities as Strategies: Cournot Equilibrium Revisited Capacity Constraints: The Edgeworth Paradox Location Models Comparative Statics and Supermodular Games Vertical Differentiation Durable Monopoly Notes Problems Classroom Game Mathematical Appendix Notation The Greek Alphabet Glossary Formulas and Functions Probability Distributions Supermodularity Fixed Point Theorems Genericity Discounting Risk References and Name Index Subject Index