Game Theory

Game Theory: An Introduction by Steven Tadelis “Steve Tadelis’s Game Theory is an ideal textbook for advanced undergraduates, and great preparation for graduate work. It provides a clear, self-contained, and rigorous treatment of all the key concepts, along with interesting applications; it also introduces key technical tools in a straightforward and intuitive way.”–Drew Fudenberg, Harvard University

Game Theory:
An Introduction
by Steven Tadelis

This comprehensive textbook introduces readers to the principal ideas and applications of game theory, in a style that combines rigor with accessibility. Steven Tadelis begins with a concise description of rational decision making, and goes on to discuss strategic and extensive form games with complete information, Bayesian games, and extensive form games with imperfect information. He covers a host of topics, including multistage and repeated games, bargaining theory, auctions, rent-seeking games, mechanism design, signaling games, reputation building, and information transmission games. Unlike other books on game theory, this one begins with the idea of rationality and explores its implications for multiperson decision problems through concepts like dominated strategies and rationalizability. Only then does it present the subject of Nash equilibrium and its derivatives.

Game Theory is the ideal textbook for advanced undergraduate and beginning graduate students. Throughout, concepts and methods are explained using real-world examples backed by precise analytic material. The book features many important applications to economics and political science, as well as numerous exercises that focus on how to formalize informal situations and then analyze them.


Table of Contents

Errata Sheet

Student’s Solution Manual

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Preface [PDF]

Chapter 1 [PDF]

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  1. The issues I have with treatments of game theory (as well as with formal logic) in real world decision making is that there is a semantic breakdown. In order to formalize a problem one needs to agree on the variable’s meaning. In the abstract, all agents are some kind of entities, while in reality they are e.g. “boss” and “underling”. And while in a game e.g. of chess both players (at least at, say master levels) understand the rules, what if one side models by rules the other side does not understand or changes ‘mid-game’? I’ve seen many game theory-advised players e.g. in auction markets and I must say, a bidder with ‘chuzpah’ instead of a game theorist at his side always outmaneuvers the theoreticians. Or let’s ask it more succinctly: does the author provide credible examples where the success of one party can be undoubtedly attributed to their grasp of game theory?