Game Theory

An Applied Introduction

by José Luis Ferreira

About the book

Introduced by author José Luis Ferreira​

The idea for a game theory textbook dedicated to social science and philosophy was not born out of thin air. At Universidad Carlos III de Madrid, where I work, being curious about their disciplines I would meet with a philosopher and a lawyer who in turn were curious about game theory. We met in my office to discuss diverse topics every Friday.

A colleague put me in contact with Jesús Zamora, another philosopher with whom I have published a couple of articles related to both philosophy and economics. I ended up inviting him to collaborate in teaching a methodology course as part of our undergraduate courses.

I later took charge of that course myself and began gathering up teaching material on the methods for social sciences. At the same time, he invited me to attend the workshops he organized at his university, the UNED, as well as to participate in the academic committee for international congresses in philosophy.

During one of those seminars I met Luc Bovens, yet another philosopher and also editor of Economics and Philosophy at the time. We published an article that consequently led to me receiving continuous requests to evaluate manuscripts on paradoxes involving how to update beliefs in the face of new information.

A modest exposure in social networks thanks to my likewise modest blog, as well as my participation in a rational and sceptical organization, introduced me to the task of using and explaining concepts from game theory outside the sphere of economics. In recent years I have designed and taught a course on game theory for political science in which this book germinated, and I have collaborated with several philosophers and sociologists in the interdisciplinary seminar within the PPE degree.

This book is my offering to the teaching in social sciences and philosophy, to the effort of all the colleagues in those disciplines who sometimes thought they learned something from me (I, of course, have learned a lot from them), and to all the students who suffered my teaching. I hope they all find some merit in this book.

The use of this book is no mystery. I advise the reader to put pen to paper to reproduce the operations, both mathematical and logical, that are carried out on its pages. They are never complicated when taken in isolation; though once accumulated, a good map is needed to follow them and understand the analysis. Technical subjects, such as mathematics or economic theory, often deceive the student.

The exercises seem easy once resolved, but, when faced with the exercise and a blank piece of paper, the task of finding the solution is usually far from trivial. This deception is more extreme in game theory. The student faces not only the problem of figuring out what mathematical operations need be performed, but also the particular and often counterintuitive logic of game theory.

Chapters 1 through 4 present the basics of game theory, while Chapters 5 through 7 show their most direct applications. Chapters 8 and 9 are more advanced. Chapters 10 through 14 offer a miscellany of topics covering the application of the simple models onto more complex case studies, an introduction to current issues within game theory such as dynamics and limited rationality, as well as the study of power indices within cooperative games.

A basic undergraduate course of 40 hours can cover Chapters 1 through 4 quite exhaustively and then incorporate the less specialized parts of Chapters 5 through 7. The course can be completed with some material from the remaining chapters according to particular interest.

For example, if the course is oriented towards political science, Chapter 14 will be of special interest. A course oriented towards other social sciences or philosophy will find cases relevant to its discipline in Chapters 10 through 13. An intermediate or advanced course can cover Chapters 7, 8, 12, 13 and some of the case studies in Chapters 10 and 11, as well as the more specialized parts of the rest of the chapters. Chapters 10 and 11 are especially recommended for the preparation of an undergraduate or a master’s thesis that uses the tools of game theory.