Strategy and Game Theory ─ Practice Exercises With Answers

Thistextbook presents worked-out exercises on game theory with detailedstep-by-step explanations. While most textbooks on gametheory focus on theoretical results, thisbook focuses on providing practical examples inwhich students can learn to systematically apply theoretical solution conceptsto different fields of economics and business. The text initially presents games that arerequired in most courses at the undergraduate level and gradually advances tomore challenging games appropriate for masters level courses. The first sixchapters cover complete-information games, separately analyzingsimultaneous-move and sequential-move games, with applications in industrialeconomics, law, and regulation. Subsequent chapters dedicate special attentionto incomplete information games, such as signaling games, cheap talk games, andequilibrium refinements, emphasizing common steps and including graphicalillustrations to focus students’ attention on the most relevant payoffcomparisons at each point of the analysis. In addition, exercises are ranked according totheir difficulty, with a letter (A-C) next to the exercise number. This allowsstudents to pace their studies and instructors to structure their classesaccordingly. By providing detailed worked-out examples, this text givesstudents at various levels the tools they need to apply the tenets of gametheory in many fields of business and economics. This text is appropriate for introductory-to-intermediatecourses in game theory at the upper undergraduate and master’s level.

Felix Munoz-Garcia, School of Economic Sciences WashingtonState University