Can game theory be saved?
AbstractGame-theoretic analysis is a well-established part of the toolkit of economic analysis. In crucial respects, however, game theory has failed to deliver on its original promise of generating sharp predictions of behavior in situations where neoclassical microeconomics has little to say. Experience has shown that in most situations, it is possible to tell a game-theoretic story to fit almost any possible outcome. We argue that, in general, any individually rational outcome of an economic interaction may be supported as the Nash equilibrium of an appropriately chosen game, and that a wide range of these outcomes will have an economically reasonable interpretation. We consider possible attempts to salvage the original objectives of the game-theoretic research program. In at least some cases, information on institutional structures and observations of interactions between agents can be used to limit the set of strategies that may be considered reasonable.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Risk and Sustainable Management Group, University of Queensland in its series Risk & Uncertainty Working Papers with number WP4R07.
Date of creation: Feb 2007
Date of revision:
Contact details of provider:
Postal: Colin Clark Building, no 39, St. Lucia, Qld. 4072
Phone: +61 7 3365 6601
Fax: +61 7 3365 6601
Web page: http://www.uq.edu.au/rsmg/index.htm
More information through EDIRC
game theory; equilibrium;
Other versions of this item:
- Menezes, Flavio & Quiggin, John, 2007. "Can Game Theory be Saved," Risk and Sustainable Management Group Working Papers, University of Queensland, School of Economics 151181, University of Queensland, School of Economics.
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Green, Richard J, 1996. "Increasing Competition in the British Electricity Spot Market," Journal of Industrial Economics, Wiley Blackwell, vol. 44(2), pages 205-16, June.
- Klemperer, Paul D & Meyer, Margaret A, 1989. "Supply Function Equilibria in Oligopoly under Uncertainty," Econometrica, Econometric Society, Econometric Society, vol. 57(6), pages 1243-77, November.
- Flavio Menezes & John Quiggin, 2007.
"Games without Rules,"
Theory and Decision, Springer,
Springer, vol. 63(4), pages 315-347, December.
- Menezes, Flavio & Quiggin, John, 2004. "Games without Rules," Risk and Sustainable Management Group Working Papers, University of Queensland, School of Economics 151166, University of Queensland, School of Economics.
- Flavio Menezes & John Quiggin, 2004. "Games without Rules," Risk & Uncertainty Working Papers, Risk and Sustainable Management Group, University of Queensland WPR04_7, Risk and Sustainable Management Group, University of Queensland.
- David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
- Grant, Simon & Quiggin, John, 1994. "Nash equilibrium with mark-up-pricing oligopolists," Economics Letters, Elsevier, vol. 45(2), pages 245-251, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David Adamson).
If references are entirely missing, you can add them using this form.