The rise of game theory around the middle of the twentieth century has profoundly affected the way economic theory is practiced. The present book is a collection of Kaushik Basu s papers on game theory and, more generally, strategic analysis. It includes papers in both pure and applied theory. In the theoretical papers the emphasis is more on the philosophical foundations of rational and strategic behaviour than on the mathematical basis of game theory. They deal with questions like: Can social order be achieved entirely through the pursuit of selfish individual aims or are social norms and a commitment to some deontic principles necessary? What role does higher knowledge of interpersonal rationality play in guiding human behaviour? The applied papers range over topics in the organization and modeling of government behaviour and topics in industrial organization theory, such as entry-deterrence, psychology and pricing and collusion and antitrust legislation.
Readership: Postgraduate students of economics and management, teachers, researchers, professional economists, management practitioners.
Kaushik Basu, Professor, Professor of Economics and C. Marks Professor, Department of economics and Director, Program on Comparative Economic Development, Cornell University
1. Introduction Part I. Rationality and Social Norms 2. The Traveller s Dilemma: Paradoxes of Rationality in Game Theory 3. On Why We Do Not Try to Walk Off Without Paying After a Taxi Ride Part II. Games and Equilibrium Behaviour 4. On the Existence of a Rationality Definition for Extensive Games 5. Strategy Subsets Closed under Rational Behaviour 6. Group Rationality, Utilitarianism, and Escher s Waterfall 7. Information and Strategy in the Iterated Prisoner s Dilemma Part III. Industrial Organization and Strategic Behaviour 8. Monopoly, Quality Uncertainty, and Status Goods 9. Why Monopolists Prefer to Make Their Goods Less Durable 10. Entry-Deterrence in Stackelberg Perfect Equilibria 11. Collusion in Finitely Repeated Oligopolies 12. Stackelberg Equilibrium in Oligopoly: An Explanation based on Managerial Incentives 13. The Strategic Role of International Credit as an Instrument of Trade 14. Why Are So Many Goods Priced to End in Nine? And Why This Practice Hur ts the Producers Part IV. Government, Games and The Law 15. Notes on Bribery and the Control of Corruption A Model of Monopoly with Strategic Government Intervention 17. On Misunderstanding Government: An Analysis of the Art of Policy Advice 18. The Economics and Law of Tenancy Rent Control
