TY  - BOOK
AU  - Rasmusen, Eric.
TI  - Games and information: an introduction to game theory
SN  - 9781405136662
U1  - 519.3 
PY  - 2007///
CY  - Malden
PB  - Blackwell
KW  - Game theory	
N1  - List of Figures x 
List of Tables xiii 
List of Games xv 
Preface xviii 
Contents and Purpose xviii 
Changes in the Second Edition, 1994 xviii 
Changes in the Third Edition, 2001 xix 
Changes in the Fourth Edition, 2006 xx 
Using the Book xxii 
The Level of Mathematics xxii 
Other Books xxiii 
Contact Information xxviii 
Acknowledgements xxviii 
Introduction 1 
History 1 
Game Theory¿s Method 2 
Exemplifying Theory 2 
This Book¿s Style 4 
Notes 6 
Part 1: Game Theory 9 
1 The Rules of the Game 11 
1.1 Definitions 11 
1.2 Dominated and Dominant Strategies: The Prisoner¿s Dilemma 19 
1.3 Iterated Dominance: The Battle of the Bismarck Sea 22 
1.4 Nash Equilibrium: Boxed Pigs, the Battle of the Sexes and 
Ranked Coordination 26 
1.5 Focal Points 32 
Notes 33 
Problems 36 
Classroom Game 38 
2 Information 40 
2.1 The Strategic and Extensive Forms of a Game 40 
2.2 Information Sets 45 
2.3 Perfect, Certain, Symmetric, and Complete Information 49 
2.4 The Harsanyi Transformation and Bayesian Games 52 
2.5 An Example: The Png Settlement Game 61 
Notes 64 
Problems 66 
Classroom Game 68 
3 Mixed and Continuous Strategies 69 
3.1 Mixed Strategies: The Welfare Game 69 
3.2 The Payoff-equating Method and Games of Timing 74 
*3.3 Mixed Strategies with General Parameters and N Players: 
The Civic Duty Game 81 
*3.4 Randomizing is not Always Mixing: The Auditing Game 85 
3.5 Continuous Strategies: The Cournot Game 87 
3.6 Continuous Strategies: The Bertrand Game, Strategic Complements, 
and 
Strategic Substitutes 90 
*3.7 Existence of Equilibrium 95 
Notes 98 
Problems 103 
Classroom Game 107 
4 Dynamic Games with Symmetric Information 108 
4.1 Subgame Perfectness 108 
4.2 An Example of Perfectness: Entry Deterrence I 111 
4.3 Credible Threats, Sunks Costs, and the Open-set Problem in the Game 
of 
Nuisance Suits 113 
4.4 Recoordination to Pareto-dominant Equilibria in Subgames: 
Pareto Perfection 120 
Notes 122 
Problems 123 
Classroom Game 126 
5 Reputation and Repeated Games with Symmetric Information 128 
5.1 Finitely Repeated Games and the Chainstore Paradox 128 
5.2 Infinitely Repeated Games, Minimax Punishments, and the Folk 
Theorem 130 
5.3 Reputation: The One-sided Prisoner¿s Dilemma 136 
5.4 Product Quality in an Infinitely Repeated Game 137 
*5.5 Markov Equilibria and Overlapping Generations: Customer Switching 
Costs 141 
*5.6 Evolutionary Equilibrium: The Hawk-Dove Game 143 
Notes 147 
Problems 151 
Classroom Game 155 
6 Dynamic Games with Incomplete Information 156 
6.1 Perfect Bayesian Equilibrium: Entry Deterrence II and III 156 
6.2 Refining Perfect Bayesian Equilibrium in the Entry Deterrence and 
PhD 
Admissions Games 160 
6.3 The Importance of Common Knowledge: Entry Deterrence IV and V 164 
6.4 Incomplete Information in the Repeated Prisoner¿s Dilemma: The Gang 
of 
Four Model 166 
6.5 The Axelrod Tournament 169 
6.6 Credit and the Age of the Firm: The Diamond Model 170 
Notes 172 
Problems 175 
Classroom Game 177 
Part 2: Asymmetric Information 179 
7 Moral Hazard: Hidden Actions 181 
7.1 Categories of Asymmetric Information Models 181 
7.2 A Principal-agent Model: The Production Game 184 
7.3 The Incentive Compatibility and Participation Constraints 194 
7.4 Optimal Contracts: The Broadway Game 195 
Notes 201 
Problems 204 
Classroom Game 209 
8 Further Topics in Moral Hazard 211 
8.1 Efficiency Wages 211 
8.2 Tournaments 214 
*8.3 Institutions and Agency Problems 216 
*8.4 Renegotiation: The Repossession Game 219 
*8.5 State-space Diagrams: Insurance Games I and II 222 
*8.6 Joint Production by Many Agents: The Holmstrom Teams Model 227 
*8.7 The Multitask Agency Problem 230 
Notes 236 
Problems 239 
Classroom Game 242 
9 Adverse Selection 243 
9.1 Introduction: Production Game VI 243 
9.2 Adverse Selection under Certainty: Lemons I and II 249 
9.3 Heterogeneous Tastes: Lemons III and IV 252 
9.4 Adverse Selection under Uncertainty: Insurance Game III 255 
*9.5 Market Microstructure 259 
*9.6 A Variety of Applications 263 
9.7 Adverse Selection and Moral Hazard Combined: Production Game VII 
266 
Notes 269 
Problems 272 
Classroom Game 274 
10 Mechanism Design and Postcontractual Hidden Knowledge 276 
10.1 Mechanisms, Unravelling, Cross Checking, and the Revelation 
Principle 276 
10.2 Myerson Mechanism Design 287 
10.3 An Example of Postcontractual Hidden Knowledge: The Salesman Game 
289 
*10.4 The Groves Mechanism 293 
10.5 Price Discrimination 296 
*10.6 Rate-of-return Regulation and Government Procurement 304 
Notes 314 
Problems 316 
Classroom Game 319 
11 Signalling 320 
11.1 The Informed Player Moves First: Signalling 320 
11.2 Variants on the Signalling Model of Education 324 
11.3 General Comments on Signalling in Education 329 
11.4 The Informed Player Moves Second: Screening 330 
*11.5 Two Signals: The Game of Underpricing New Stock Issues 338 
*11.6 Signal Jamming and Limit Pricing 341 
*11.7 Countersignalling 345 
Notes 348 
Problems 349 
Classroom Game 352 
Part 3: Applications 355 
12 Bargaining 357 
12.1 The Basic Bargaining Problem: Splitting a Pie 357 
12.2 The Nash Bargaining Solution 359 
12.3 Alternating Offers over Finite Time 361 
12.4 Alternating Offers over Infinite Time 362 
12.5 Incomplete Information 365 
*12.6 Setting Up a Way to Bargain: The Myerson¿Satterthwaite Model 369 
Notes 380 
Problems 381 
Classroom Game 384 
13 Auctions 385 
13.1 Values Private and Common, Continuous and Discrete 385 
13.2 Optimal Strategies under Different Rules in Private-value Auctions 
390 
13.3 Revenue Equivalence, Risk Aversion, and Uncertainty 403 
13.4 Reserve Prices and the Marginal Revenue Approach 409 
13.5 Common-value Auctions and the Winner¿s Curse 414 
13.6 Asymmetric Equilibria, Affiliation, and Linkage: The Wallet Game 
423 
Notes 428 
Problems 430 
Classroom Game 432 
14 Pricing 433 
14.1 Quantities as Strategies: Cournot Equilibrium Revisited 433 
14.2 Capacity Constraints: The Edgeworth Paradox 436 
14.3 Location Models 441 
14.4 Comparative Statics and Supermodular Games 449 
*14.5 Vertical Differentiation 454 
*14.6 Durable Monopoly 461 
Notes 467 
Problems 469 
Classroom Game 471 
Mathematical Appendix 473 
*A.1 Notation 473 
*A.2 The Greek Alphabet 475 
*A.3 Glossary 475 
*A.4 Formulas and Functions 479 
*A.5 Probability Distributions 480 
A.6 Supermodularity 482 
A.7 Fixed Point Theorems 484 
*A.8 Genericity 485 
*A.9 Discounting 486 
*A.10 Risk 487 
References and Name Index 493 
Subject Index 521
ER  -