Giocoli, Nicola (2008): Three alternative (?) stories on the late 20th-century rise of game theory. Published in: Studi e Note di Economia , Vol. 14, No. 2 (2009): pp. 187-210.
Download (176Kb) | Preview
The paper presents three different reconstructions of the 1980s boom of game theory and its rise to the present status of indispensable tool-box for modern economics. The first story focuses on the Nash refinements literature and on the development of Bayesian games. The second emphasizes the role of antitrust case law, and in particular of the rehabilitation, via game theory, of some traditional antitrust prohibitions and limitations which had been challenged by the Chicago approach. The third story centers on the wealth of issues classifiable under the general headline of "mechanism design" and on the game theoretical tools and methods which have been applied to tackle them. The bottom lines are, first, that the three stories need not be viewed as conflicting, but rather as complementary, and, second, that in all stories a central role has been played by John Harsanyi and Bayesian decision theory.
|Item Type:||MPRA Paper|
|Original Title:||Three alternative (?) stories on the late 20th-century rise of game theory|
|Keywords:||game theory; mechanism design; refinements of Nash equilibrium; antitrust law; John Harsanyi|
|Subjects:||B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B21 - Microeconomics
B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B13 - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Stockholm School)
C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C70 - General
|Depositing User:||Nicola Giocoli|
|Date Deposited:||30. Sep 2011 16:22|
|Last Modified:||19. Feb 2013 17:05|
AREEDA P.E. AND TURNER D.F. 1975, “Predatory pricing and related practices under Section 2 of the Sherman Act”, Harvard Law Review, 88, 697-733.
ARROW K.J. AND HURWICZ L. EDS. 1977, Studies in Resource Allocation Processes, Cambridge UP.
AUMANN R.J. 1974. “Subjectivity and correlation in randomized strategies”, Journal of Mathematical Economics, 1, 67–96.
_____ AND MASCHLER M. 1995, Repeated Games with Incomplete Information, MIT Press
BARON, D. AND MYERSON R. 1982, “Regulating a monopolist with unknown costs”, Econometrica 50, 911-930.
BENOIT J.P. 1984, “Financially constrained entry in a game with incomplete information”, Rand Journal of Economics, 15, 490-9.
BORK R.H. 1978, The Antitrust Paradox. A Policy at War with Itself, The Free Press.
DASGUPTA, P., HAMMOND, P. AND MASKIN, E. 1979, “The implementation of social choice rules: some general results on incentive compatibility”, Review of Economic Studies, 46, 185–216.
FEINBERG S.E. 2008, “The Early Statistical Years: 1947-1967. A Conversation with Howard Raiffa”, Statistical Science, 23, n.1, 136-149.
GIBBARD A. 1973, “Manipulation of voting schemes: a general result”, Econometrica, 41, 587–602.
GIOCOLI N. 2000, “Oskar Morgenstern and the origin of the game-theoretic approach to institutional economics”, in: Porta P.L., Scazzieri R. and Skinner A. (eds.), Knowledge, Institutions and the Division of Labour, Cheltenham: Elgar, 169-196.
GIOCOLI N. 2003, Modeling Rational Agents: From Interwar Economics to Early Modern Game Theory, Edward Elgar.
GIOCOLI N. 2003a, “Fixing the point. The contribution of early game theory to the tool box of modern economics”, Journal of Economic Methodology, vol.10, n.1, 1-39.
GIOCOLI N. 2004, “Nash equilibrium”, History of Political Economy, vol.36, n.4, 639-666.
GIOCOLI N. 2009, “Mathematics as the Role Model for Neoclassical Economics”, in: Arena R., Dow S. and M. Klaes eds., Open Economics. Economics in Relation to Other Disciplines, Routledge, 127-147.
GIOCOLI N. 2010, “Competition vs. Property Rights: American Antitrust Law, the Freiburg School and the Early Years of European Competition Policy”, Journal of Competition Law and Economics, forthcoming.
GOVINDAN S. AND WILSON R. 2007, “Refinements of Nash equilibrium”, in: Durlauf S.N. and Blume L.E. eds, The New Palgrave Dictionary of Economics, Second Edition.
HARSANYI J.C. 1967-68, “Games with incomplete information played by ’Bayesian’ Players”, Parts I-III, Management Science, 8, 159-182, 320-334, 486-502.
____ 1973, “Games with randomly disturbed payoffs: a new rationale for mixed strategy equilibrium points”, International Journal of Game Theory, 14, 1-29.
HAYEK F.A. VON 1945, “The use of knowledge in society”, American Economic Review, 35, 519-530
HOLMSTROM B. 1977, On incentives and control in organizations, Ph.D. thesis, Graduate School of Business, Stanford University.
HURWICZ L. 1960, “Optimality and informational efficiency in resource allocation processes”, in: Arrow K.J., Karlin S. and Suppes P. eds., Mathematical Methods in the Social Sciences, Stanford UP.
_____ 1972, “On informationally decentralized systems”, in: McGuire C.B. and Radner R. eds., Decision and Organization: a Volume in Honor of Jacob Marshak, North-Holland, 297-336.
KOVACIC W.E. 1992, “The influence of economics in antitrust law”, Economic Inquiry, 30 (2), 294-306.
KOVACIC W.E. AND SHAPIRO C. 2000, “Antitrust policy: a century of economic and legal thinking”, Journal of Economic Perspectives, 14 (1), 43-60.
KREPS D.M. 1990, A Course in Microeconomic Theory, Princeton UP.
____ AND WILSON R. 1982, “Sequential Equilibria”, Econometrica, 50 (4), 863-94,
____ AND WILSON R. 1982a, “Reputation and imperfect information”, Journal of Economic Theory, 27, 253-78. LUCE R.D. AND RAIFFA H. 1957, Games and Decisions, John Wiley & Sons.
MARTIN S. 2007, “Remembrance of things past: antitrust, ideology, and the development of industrial economics”, in: Ghosal V. and Stennek J. eds., The Political Economy of Antitrust, Elsevier, 25-57
MASON E.S. 1939, “Price and production policies of large-scale enterprises”, American Economic Review Papers and Proceedings, 29 (1), 61-74.
MCGEE J. 1958, “Predatory price cutting: the Standard Oil (NJ) case”, Journal of Law and Economics, 1, 137-69.
MCGEE J. 1980, “Predatory pricing revisited”, Journal of Law and Economics, 23 (2), 289-330.
MILGROM P. AND ROBERTS J. 1982, “Predation, reputation and entry deterrence”, Journal of Economic Theory, 27, 280-312. MOTTA M. 2004, Competition Policy. Theory and Practice, Cambridge UP.
MYERSON R. 1979, “Incentive compatibility and the bargaining problem”, Econometrica, 47, 61–74.
____ 1982, “Optimal coordination mechanisms in generalized principal–agent problems”, Journal of Mathematical Economics, 10, 67–81.
____ 1989, “Mechanism Design”, in: Eatwell J., Milgate M. and Newman P. eds., The New Palgrave: Allocation, Information, and Markets, Norton, 191-206.
____ 1991, Game Theory. Analysis of Conflict, Harvard UP. ____ 1999, “Nash equilibrium and the history of economic theory”, Journal of Economic Literature, 37, 1067-82.
____ 2001, “Learning Game Theory from John Harsanyi”, Games and Economic Behavior, 36, 20-25.
____ 2004, “Harsanyi’s games with incomplete information”, Management Science, 50:12 (supplement), 1818-24.
____ 2007, “Fundamental theory of institutions. A lecture in honor of Leo Hurwicz”, Econometric Society, North American Meeting, University of Minnesota, June 2006.
____ 2008, “John C. Harsanyi (1920-200)”, in: Durlauf S.N. and Blume L.E. eds, The New Palgrave Dictionary of Economics, Second Edition.
____ 2008a, “Revelation principle”, in: Durlauf S.N. and Blume L.E. eds, The New Palgrave Dictionary of Economics, Second Edition.
OWEN G. 1982 [first edn 1970], Game Theory, Academic Press.
PAGE W.H. 2008, “The ideological origins and evolution of antitrust law”, Collins W.D. (ed.), Issues in Competition Law and Policy, ABA Antitrust Section, 1, n.1.
REDER M. 1982, “Chicago Economics: permanence and change”, Journal of Economic Literature, 20, 1-38.
RIZVI S.A.T. 1994, “Game theory to the rescue?”, Contributions to Political Economy, 13, 1-28.
ROSENTHAL R.W. 1978, “Arbitration of two-party disputes under uncertainty”, Review of Economic Studies, 45, 595–604.
ROYAL SWEDISH ACADEMY OF SCIENCES 2007, “Mechanism design theory”, Scientific background on the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2007
SALONER G. 1987, “Predation, mergers, and incomplete information”, Rand Journal of Economics, 18, 156-86
SAVAGE L.J. 1954, The Foundations of Statistics, John Wiley & Sons.
SCHOTTER A. AND SCHWÖDIAUER G. 1980, “Economics and the theory of games: a survey”, Journal of Economic Literature, 18:2, 479-527.
SELTEN R. 1965, “Spieltheoretische Behandlung eines Oligopolmodells mit Nachfragetragheit”, Zeitschrift für die gesammte Staatswissenschaft, 121, 301-324 and 667-689.
_____ 1975, “Re-examination of the perfectness concept for equilibrium points in extensive games”, International Journal of Game Theory, 4, 25-55.
_____ 1978, “The chain-store paradox”, Theory and Decision, 9, 127-59.
VON NEUMANN J. AND MORGENSTERN O. 1953 [first edn 1944], Theory of Games and Economic Behavior, Princeton UP.
WALD A. 1950, Statistical Decision Functions, John Wiley & Sons.
WEINTRAUB E.R. 2002, How Economics Became a Mathematical Science, Duke UP.