Are people ever rational? Consider this: You auction off a one-dollar bill to the highest bidder, but you set the rules so that the second highest bidder also has to pay the amount of his last bid, even though he gets nothing. Would people ever enter such an auction? Not only do they, but according to Martin Shubik, the game's inventor, the average winning bid (for a dollar, remember) is $3.40. Many winners report that they bid so high only because their opponent "went completely crazy." This game lies at the intersection of three subjects of eternal fascination: human psychology, morality, and John von Neumann's game theory. Hungarian game-theorist Laszlo Mero introduces us to the basics of game theory, including such concepts as zero-sum games, Prisoner's Dilemma and the origins of altruism; shows how game theory is applicable to fields ranging from physics to politics; and explores the role of rational thinking in the context of many different kinds of thinking. This fascinating, urbane book will interest everyone who wonders what mathematics can tell us about the human condition.

Applications of operant techniques in treatment and education have proliferated in recent years. Among the various techniques, the token economy has been particu larly popular. The token economy has been extended to many populations included in psychiatry, clinical psychology, education, and the mental health fields in general. Of course, merely because a technique is applied widely does not neces sarily argue for its efficacy. Yet, the token economy has been extensively re searched. The main purpose of this book is to review, elaborate, and evaluate critically research bearing on the token economy. The book examines several features of the token economy including the variables that contribute to its efficacy, the accomplishments, limitations, and potential weaknesses, and recent advances. Because the token economy literature is vast, the book encompasses programs in diverse treatment, rehabilitation, and educational settings across a wide range of populations and behaviors. Within the last few years, a small number of books on token economies have appeared. Each of these books describes a particular token economy in one treatment, etting, details practical problems encountered, and provides suggestions for ad ministering the program. This focus is important but neglects the extensive scholarly research on token economies. The present book reviews research across diverse settings and clients. Actually, this focus is quite relevant for implementing token economies because the research reveals those aspects and treatment variations that contribute to or enhance client performance."

Recent years have witnessed a surge of activity in the field of dynamic both theory and applications. Theoretical as well as practical games, in problems in zero-sum and nonzero-sum games, continuous time differential and discrete time multistage games, and deterministic and stochastic games games are currently being investigated by researchers in diverse disciplines, such as engineering, mathematics, biology, economics, management science, and political science. This surge of interest has led to the formation of the International Society of Dynamic Games (ISDG) in 1990, whose primary goal is to foster the development of advanced research and applications in the field of game theory. One important activity of the Society is to organize biannually an international symposium which aims at bringing together all those who contribute to the development of this active field of applied science. In 1992 the symposium was organized in Grimentz, Switzerland, under the supervision of an international scientific committee and with the help of a local organizing committee based at University of Geneva. This book, which is the first volume in the new Series, Annals of the International Society of Dynamic Games (see the Preface to the Series), is based on presentations made at this symposium. It is however more than a book of proceedings for a conference. Every paper published in this volume has passed through a very selective refereeing process, as in an archival technical journal.

Issues relating to the emergence, persistence, and stability of cooperation among social agents of every type are widely recognized to be of paramount importance. They are also analytically difficult and intellectually challenging. This book, arising from a NATO Advanced Study Institute held at SUNY in 1994, is an up-to-date presentation of the contribution of game theory to the subject. The contributors are leading specialists who focus on the problem from the many different angles of game theory, including axiomatic bargaining theory, the Nash program of non-cooperative foundations, game with complete information, repeated and sequential games, bounded rationality methods, evolutionary theory, experimental approaches, and others. Together they offer significant progress in understanding cooperation.

The aim of" the present monograph is two-fold: (a) to give a short account of the main results concerning the theory of random systems with complete connections, and (b) to describe the general learning model by means of random systems with complete connections. The notion of chain with complete connections has been introduced in probability theory by ONICESCU and MIHOC (1935a). These authors have set themselves the aim to define a very broad type of dependence which takes into account the whole history of the evolution and thus includes as a special case the Markovian one. In a sequel of papers of the period 1935-1937, ONICESCU and MIHOC developed the theory of these chains for the homogeneous case with a finite set of states from differ ent points of view: ergodic behaviour, associated chain, limit laws. These results led to a chapter devoted to these chains, inserted by ONI CESCU and MIHOC in their monograph published in 1937. Important contributions to the theory of chains with complete connections are due to DOEBLIN and FORTET and refer to the period 1937-1940. They consist in the approach of chains with an infinite history (the so-called chains of infinite order) and in the use of methods from functional analysis."

Predation is an ecological factor of almost universal importance for the biol ogist who aims at an understanding of the habits and structures of animals. Despite its pervasive nature opinions differ as to what predation really is. So far it has been defined only in negative terms; it is thought not to be par asitism, the other great process by which one organism harms another, nor filter-feeding, carrion-eating, or browsing. Accordingly, one could define predation as a process by which an animal spends some effort to locate a live prey and, in addition, spends another effort to mutilate or kill it. Ac cording to this usage of the word a nudibranch, for example, that feeds on hydroids would be a predator inasmuch as it needs some time to locate col onies of its prey which, after being located, scarcely demand more than eating, which differs little from browsing. From the definition just proposed consumption of the prey following its capture has been intentionally omit ted. Indeed, an animal may be disposed of without being eaten. Hence the biological significance of predation may be more than to maintain nutrition al homeostasis. In fact, predation may have something in common with the more direct forms of competition, a facet that will be only cursorily touched upon in this book."

The developments within the computationally and numerically oriented ar eas of Operations Research, Finance, Statistics and Economics have been sig nificant over the past few decades. Each area has been developing its own computer systems and languages that suit its needs, but there is relatively little cross-fertilization among them yet. This volume contains a collection of papers that each highlights a particular system, language, model or paradigm from one of the computational disciplines, aimed at researchers and practitioners from the other fields. The 15 papers cover a number of relevant topics: Models and Modelling in Operations Research and Economics, novel High-level and Object-Oriented approaches to programming, through advanced uses of Maple and MATLAB, and applications and solution of Differential Equations in Finance. It is hoped that the material in this volume will whet the reader's appetite for discovering and exploring new approaches to old problems, and in the longer run facilitate cross-fertilization among the fields. We would like to thank the contributing authors, the reviewers, the publisher, and last, but not least, Jesper Saxtorph, Anders Nielsen, and Thomas Stidsen for invaluable technical assistance.

The English edition differs only slightly from the Russian original. The main struc tural difference is that all the material on the theory of finite noncooperative games has been collected in Chapter 2, with renumbering of the material of the remain ing chapters. New sections have been added in this chapter: devoted to general questions of equilibrium theory in nondegenerate games, subsections 3.9-3.17, by N.N. Vorob'ev, Jr.; and 4, by A.G. Chernyakov; and 5, by N.N. Vorob'ev, Jr., on the computational complexity of the process of finding equilibrium points in finite games. It should also be mentioned that subsections 3.12-3.14 in Chapter 1 were written by E.B. Yanovskaya especially for the Russian edition. The author regrets that the present edition does not reflect the important game-theoretical achievements presented in the splendid monographs by E. van Damme (on the refinement of equilibrium principles for finite games), as well as those by J.e. Harsanyi and R. Selten, and by W. Giith and B. Kalkofen (on equilibrium selection). When the Russian edition was being written, these direc tions in game theory had not yet attained their final form, which appeared only in quite recent monographs; the present author has had to resist the temptation of attempting to produce an elementary exposition of the new theories for the English edition; readers of this edition will find only brief mention of the new material."

The ?nite-dimensional nonlinear complementarity problem (NCP) is a s- tem of ?nitely many nonlinear inequalities in ?nitely many nonnegative variables along with a special equation that expresses the complementary relationship between the variables and corresponding inequalities. This complementarity condition is the key feature distinguishing the NCP from a general inequality system, lies at the heart of all constrained optimi- tion problems in ?nite dimensions, provides a powerful framework for the modeling of equilibria of many kinds, and exhibits a natural link between smooth and nonsmooth mathematics. The ?nite-dimensional variational inequality (VI), which is a generalization of the NCP, provides a broad unifying setting for the study of optimization and equilibrium problems and serves as the main computational framework for the practical solution of a host of continuum problems in the mathematical sciences. The systematic study of the ?nite-dimensional NCP and VI began in the mid-1960s; in a span of four decades, the subject has developed into a very fruitful discipline in the ?eld of mathematical programming. The - velopments include a rich mathematical theory, a host of e?ective solution algorithms, a multitude of interesting connections to numerous disciplines, and a wide range of important applications in engineering and economics. As a result of their broad associations, the literature of the VI/CP has bene?ted from contributions made by mathematicians (pure, applied, and computational), computer scientists, engineers of many kinds (civil, ch- ical, electrical, mechanical, and systems), and economists of diverse exp- tise (agricultural, computational, energy, ?nancial, and spatial).

Complementarity theory is a new domain in applied mathematics and is concerned with the study of complementarity problems. These problems represent a wide class of mathematical models related to optimization, game theory, economic engineering, mechanics, fluid mechanics, stochastic optimal control etc. The book is dedicated to the study of nonlinear complementarity problems by topological methods. Audience: Mathematicians, engineers, economists, specialists working in operations research and anybody interested in applied mathematics or in mathematical modeling.

STATISTICAL PHYSICS AND ECONOMICS covers systematically and in simple language the physical foundations of evolution equations, stochastic processes, and generalized Master equations applied to complex economic systems. Strong emphasis is placed on concepts, methods, and techniques for modeling, assessment, and solving or estimation of economic problems in an attempt to understand the large variability of financial markets, trading and communication networks, barriers and acceleration of the economic growth as well as the kinetics of product and money flows. The main focus of the book is a clear physical understanding of the self-organizing principles in social and economic systems. This modern introduction will be a useful tool for researchers, engineers, as well as graduate and post-graduate students in econophysics and related topics.

The world's best negotiators have moved beyond the conventional wisdom by utilising cutting-edge studies and real-world results. It's time you did too. For over twenty years, David Sally has been teaching the art of negotiation at leading business schools and to executives at top companies. Now, using insights from social psychology and game theory, he delivers the proven, clear, actionable advice you need to stay one step ahead. By studying great examples, from Machiavelli to Wall Street, Xi Jinping and Barack Obama, he explores how the game's masters navigate the field strategically, craftily, even emotionally. The best know every negotiation is different and that your tactics are, in part, determined by your opponent. One Step Ahead will make sure that you have what it takes to come out on top, no matter who you are facing across the table.

The theory of dynamic games is very rich in nature and very much alive If the reader does not already agree with this statement, I hope he/she will surely do so after having consulted the contents of the current volume. The activities which fall under the heading of 'dynamic games' cannot easily be put into one scientific discipline. On the theoretical side one deals with differential games, difference games (the underlying models are described by differential, respec tively difference equations) and games based on Markov chains, with determin istic and stochastic games, zero-sum and nonzero-sum games, two-player and many-player games - all under various forms of equilibria. On the practical side, one sees applications to economics (stimulated by the recent Nobel prize for economics which went to three prominent scientists in game theory), biology, management science, and engineering. The contents of this volume are primarily based on selected presentations made at the Sixth International Symposium on Dynamic Games and Applica tions, held in St Jovite, Quebec, Canada, 13-15 July 1994. Every paper that appears in this volume has passed through a stringent reviewing process, as is the case with publications for archival technical journals. This conference, as well as its predecessor which was held in Grimentz, 1992, took place under the auspices of the International Society of Dynamic Games (ISDG), established in 1990. One of the activities of the ISDG is the publication of these Annals. The contributions in this volume have been grouped around five themes."

This book constitutes the refereed proceedings of the Third International Conference on Decision and Game Theory for Security, GameSec 2012, held in Budapest, Hungary, in November 2012. The 18 revised full papers presented were carefully reviewed and selected from numerous submissions. The papers are organized in topical sections on secret communications, identification of attackers, multi-step attacks, network security, system defense, and applications security.

Our objectives may be briefly stated. They are two. First, we have sought to provide a compact and digestible exposition of some sub-branches of mathematics which are of interest to economists but which are underplayed in mathematical texts and dispersed in the journal literature. Second, we have sought to demonstrate the usefulness of the mathematics by providing a systematic account of modern neoclassical economics, that is, of those parts of economics from which jointness in production has been excluded. The book is introductory not in the sense that it can be read by any high-school graduate but in the sense that it provides some of the mathematics needed to appreciate modern general-equilibrium economic theory. It is aimed primarily at first-year graduate students and final-year honors students in economics who have studied mathematics at the university level for two years and who, in particular, have mastered a full-year course in analysis and calculus. The book is the outcome of a long correspondence punctuated by periodic visits by Kimura to the University of New South Wales. Without those visits we would never have finished. They were made possible by generous grants from the Leverhulme Foundation, Nagoya City University, and the University of New South Wales. Equally indispensible were the expert advice and generous encouragement of our friends Martin Beckmann, Takashi Negishi, Ryuzo Sato, and Yasuo Uekawa.

During the last decade I have explored the consequences of what I have chosen to call the 'consistent preferences' approach to deductive reasoning in games. To a great extent this work has been done in coop eration with my co-authors Martin Dufwenberg, Andres Perea, and Ylva Sovik, and it has lead to a series of journal articles. This book presents the results of this research program. Since the present format permits a more extensive motivation for and presentation of the analysis, it is my hope that the content will be of interest to a wider audience than the corresponding journal articles can reach. In addition to active researcher in the field, it is intended for graduate students and others that wish to study epistemic conditions for equilibrium and rationalizability concepts in game theory. Structure of the book This book consists of twelve chapters. The main interactions between the chapters are illustrated in Table 0.1. As Table 0.1 indicates, the chapters can be organized into four dif ferent parts. Chapters 1 and 2 motivate the subsequent analysis by introducing the 'consistent preferences' approach, and by presenting ex amples and concepts that are revisited throughout the book. Chapters 3 and 4 present the decision-theoretic framework and the belief operators that are used in later chapters. Chapters 5, 6, 10, and 11 analyze games in the strategic form, while the remaining chapters-Chapters 7, 8, 9, and 12-are concerned with games in the extensive form."

Econometric theory, as presented in textbooks and the econometric literature generally, is a somewhat disparate collection of findings. Its essential nature is to be a set of demonstrated results that increase over time, each logically based on a specific set of axioms or assumptions, yet at every moment, rather than a finished work, these inevitably form an incomplete body of knowledge. The practice of econometric theory consists of selecting from, applying, and evaluating this literature, so as to test its applicability and range. The creation, development, and use of computer software has led applied economic research into a new age. This book describes the history of econometric computation from 1950 to the present day, based upon an interactive survey involving the collaboration of the many econometricians who have designed and developed this software. It identifies each of the econometric software packages that are made available to and used by economists and econometricians worldwide.

Birkhauser Boston, Inc., will publish a series of carefully selected mono graphs in the area of mathematical modeling to present serious applications of mathematics for both the undergraduate and the professional audience. Some of the monographs to be selected and published will appeal more to the professional mathematician and user of mathematics, serving to familiarize the user with new models and new methods. Some, like the present monograph, will stress the educational aspect and will appeal more to a student audience, either as a textbook or as additional reading. We feel that this first volume in the series may in itself serve as a model for our program. Samuel Goldberg attaches a high priority to teaching stu dents the art of modeling, that is, to use his words, the art of constructing useful mathematical models of real-world phenomena. We concur. It is our strong conviction as editors that the connection between the actual problems and their mathematical models must be factually plausible, if not actually real. As this first volume in the new series goes to press, we invite its readers to share with us both their criticisms and their constructive suggestions."

Many boundary value problems are equivalent to Au=O (1) where A: X ---+ Y is a mapping between two Banach spaces. When the problem is variational, there exists a differentiable functional 0 and e E X such that lIell > rand inf"

Since the first Congress in Zurich in 1897, the ICM has been an eagerly awaited event every four years. Many of these occasions are celebrated for historie developments and seminal contributions to mathematics. 2002 marks the year of the 24th ICM, the first of the new millennium. Also historie is the first ICM Satellite Conference devoted to game theory and applications. It is one of those rare occasions, in which masters of the field are able to meet under congenial surroundings to talk and share their gathered wisdom. As is usually the case in ICM meetings, participants of the ICM Satellite Conference on Game Theory and Applications (Qingdao, August 2(02) hailed from the four corners of the world. In addition to presentations of high qual ity research, the program also included twelve invited plenary sessions with distinguished speakers. This volume, which gathers together selected papers read at the conference, is divided into four sections: (I) Foundations, Concepts, and Structure. (II) Equilibrium Properties. (III) Applications to the Natural and Social Sciences. (IV) Computational Aspects of Games."

The ?nite-dimensional nonlinear complementarity problem (NCP) is a s- tem of ?nitely many nonlinear inequalities in ?nitely many nonnegative variables along with a special equation that expresses the complementary relationship between the variables and corresponding inequalities. This complementarity condition is the key feature distinguishing the NCP from a general inequality system, lies at the heart of all constrained optimi- tion problems in ?nite dimensions, provides a powerful framework for the modeling of equilibria of many kinds, and exhibits a natural link between smooth and nonsmooth mathematics. The ?nite-dimensional variational inequality (VI), which is a generalization of the NCP, provides a broad unifying setting for the study of optimization and equilibrium problems and serves as the main computational framework for the practical solution of a host of continuum problems in the mathematical sciences. The systematic study of the ?nite-dimensional NCP and VI began in the mid-1960s; in a span of four decades, the subject has developed into a very fruitful discipline in the ?eld of mathematical programming. The - velopments include a rich mathematical theory, a host of e?ective solution algorithms, a multitude of interesting connections to numerous disciplines, and a wide range of important applications in engineering and economics. As a result of their broad associations, the literature of the VI/CP has bene?ted from contributions made by mathematicians (pure, applied, and computational), computer scientists, engineers of many kinds (civil, ch- ical, electrical, mechanical, and systems), and economists of diverse exp- tise (agricultural, computational, energy, ?nancial, and spatial).

Trans-boundary water resources are often a cause of conflict among riparian entities. Increasing demand for water resources and deterioration of existing water sources underscore the need to resolve conflicts over the allocation of consumption and pollution rights among conflicting uses and users. Because economic growth of the entities that share a water resource depends on sustainability of the resource, water has great potential as a basis for cooperation among political entities. However, enforcement of cooperation particularly in international settings is limited. Thus, parties sharing a water resource will form and remain in a cooperating coalition only when economic incentives for each can be identified. This book offers an economic approach to resolution of conflicts by identifying economic mechanisms that encourage sustainable cooperation. The book includes discussions on international, interstate, and intrastate disputes regarding both water quantity and water quality issues. It presents mechanisms for facilitating cooperation among users from agricultural, industrial, domestic, and environmental sectors.It considers the experience and potential in many regions around the world including Australia (the Muray-Darling Basin), Latin America (Chile), the Middle East (Israel and the Palestinian Authority), the U.S. (California, Florida's Everglades, Hawaii, and the Chesapeake Bay), and Africa (South Africa, Lesotho). Part I of the book discusses international experience in forming water coalitions and offers an illustrative model of water quality coalitions. It emphasizes the dependence of sustainability of international agreements on the practical ability to create incentives through economic mechanisms and political linkages that overcome the problem of limited enforcement due to sovereignty claims. Part II of the book discusses management of intrastate U.S. water resources involving competing local jurisdictions or user groups and the U.S. and Australian attempts to facilitate state management of interstate water resources through federal cooperation. Part III of the book explores the expanding scope of trans-boundary water resource issues that contribute to complexity of conflict beyond traditional interests such as allocation and navigation rights.In particular, it analyzes the economic implications of nutrient, land, and airshed management in an environment where the interaction of trans-boundary water resources with the ecological system is considered. Trans-boundary water usage and infrastructure are discussed in the context of privatization and political uncertainty. Part IV of the book examines economic solutions to trans-boundary water allocation including water markets, tradable water permits, contractual arrangements, and coordinated management. The interaction between ground and surface water and the interaction between desalinated, recycled, and fresh water is analyzed in the context of optimal water allocation. The book concludes with a critical discussion of the role and potential of the economics profession in contributing to conflict resolution and management of trans-boundary water resources. The strengths and weaknesses of economic analysis are discussed with special consideration of the modern tools of bargaining theory and game theory that go beyond economic efficiency in considering political realities.

Max-Min problems are two-step allocation problems in which one side must make his move knowing that the other side will then learn what the move is and optimally counter. They are fundamental in parti cular to military weapons-selection problems involving large systems such as Minuteman or Polaris, where the systems in the mix are so large that they cannot be concealed from an opponent. One must then expect the opponent to determine on an optlmal mixture of, in the case men tioned above, anti-Minuteman and anti-submarine effort. The author's first introduction to a problem of Max-Min type occurred at The RAND Corporation about 1951. One side allocates anti-missile defenses to various cities. The other side observes this allocation and then allocates missiles to those cities. If F(x, y) denotes the total residual value of the cities after the attack, with x denoting the defender's strategy and y the attacker's, the problem is then to find Max MinF(x, y) = Max MinF(x, y)] ."

This book constitutes the refereed proceedings of the 18th International Symposium Fundamentals of Computation Theory, FCT 2011, held in Oslo, Norway, in August 2011. The 28 revised full papers presented were carefully reviewed and selected from 78 submissions. FCT 2011 focused on algorithms, formal methods, and emerging fields, such as ad hoc, dynamic and evolving systems; algorithmic game theory; computational biology; foundations of cloud computing and ubiquitous systems; and quantum computation.

The management of financial portfolios or funds constitutes a widely known problematic in financial markets which normally requires a rigorous analysis in order to select the most profitable assets. This subject is becoming popular among computer scientists which try to adapt known Intelligent Computation techniques to the market's domain. This book proposes a potential system based on Genetic Algorithms, which aims to manage a financial portfolio by using technical analysis indicators. The results are promising since the approach clearly outperforms the remaining approaches during the recent market crash.