Game Theory and Exercises introduces the main concepts of game theory, along with interactive exercises to aid readers' learning and understanding. Game theory is used to help players understand decision-making, risk-taking and strategy and the impact that the choices they make have on other players; and how the choices of those players, in turn, influence their own behaviour. So, it is not surprising that game theory is used in politics, economics, law and management. This book covers classic topics of game theory including dominance, Nash equilibrium, backward induction, repeated games, perturbed strategie s, beliefs, perfect equilibrium, Perfect Bayesian equilibrium and replicator dynamics. It also covers recent topics in game theory such as level-k reasoning, best reply matching, regret minimization and quantal responses. This textbook provides many economic applications, namely on auctions and negotiations. It studies original games that are not usually found in other textbooks, including Nim games and traveller's dilemma. The many exercises and the inserts for students throughout the chapters aid the reader's understanding of the concepts. With more than 20 years' teaching experience, Umbhauer's expertise and classroom experience helps students understand what game theory is and how it can be applied to real life examples. This textbook is suitable for both undergraduate and postgraduate students who study game theory, behavioural economics and microeconomics.

By Gisele Umbhauer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Part I: Interaction and Macro-Struture: an Overview Economies with Interacting Agents By Alan P. Kinnan (GREQUAM) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Spatial Interactions in Dynamic Decentralised Economies: a Review By Giorgio Fagiolo (EUI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Network, Interactions between Economic Agents and Irreversibilities: the Case of the Choice among Competing Technologies By Patrick Cohendet (BETA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Rationality and Heterogeneity in Stochastic Aggregation Models By Jean-Michel Dalle (IEPE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Part II: Local Interaction, Learning and Diversity Networks Competition under Local Interaction and Behavioral Learning By Nicolas Jonard (BETA), Patrick Llerena (BETA) and Babak Mehm- pazir (BETA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Can Neighborhood Protect Diversity By Gisele Umbhauer (BETA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 Interaction of Local Interactions: Localized Learning and Network Exter nalities By Nicolas Jonard (BETA) and Murat ytldlZoglu(BETA) . . . . . . . . . . . . 189 viii List of Contribution Evolution of Cooperation with Local Interactions and Imitation By Vanessa Oltra (BETA) and Eric Schenk (BETA) . . . . . . . . . . . . . . . . . . 205 On the Frontier: Structural Effects in a Diffusion Model based on Influence Matrixes By Alexandre Steyer (REC) and Jean-Benoit Zimmermann (GREQUAM) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 Part III: Behaviors, Externalities and the Emergence of Networks Networks, Specialization and Trust By Ehud Zuscovitch (BETA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 Network Externalities, Cost FUnctions and Standardization By Hubert Stahn (BETA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 The Emergence of Network Organizations in Processes of Technological Choice: a Viability Approach By Jean-Pierre Aubin (IIASA) and Dominique Foray (IRIS-TS) . . . . . . 283 Are more Informed Agents able to shatter Information Cascades in the Lab? By Marc Willinger (BETA) and Anthony Ziegelmeyer (BETA) . . . . . . ."

Game Theory and Exercises introduces the main concepts of game theory, along with interactive exercises to aid readers' learning and understanding. Game theory is used to help players understand decision-making, risk-taking and strategy and the impact that the choices they make have on other players; and how the choices of those players, in turn, influence their own behaviour. So, it is not surprising that game theory is used in politics, economics, law and management. This book covers classic topics of game theory including dominance, Nash equilibrium, backward induction, repeated games, perturbed strategie s, beliefs, perfect equilibrium, Perfect Bayesian equilibrium and replicator dynamics. It also covers recent topics in game theory such as level-k reasoning, best reply matching, regret minimization and quantal responses. This textbook provides many economic applications, namely on auctions and negotiations. It studies original games that are not usually found in other textbooks, including Nim games and traveller's dilemma. The many exercises and the inserts for students throughout the chapters aid the reader's understanding of the concepts. With more than 20 years' teaching experience, Umbhauer's expertise and classroom experience helps students understand what game theory is and how it can be applied to real life examples. This textbook is suitable for both undergraduate and postgraduate students who study game theory, behavioural economics and microeconomics.