1、Game Theory and EconomicAnalysisGame Theory and Economic Analysis presents the wide range of current con-tributions of game theory to economics. The chapters fall broadly into twocategories. Some lay out in a jargon-free manner a particular branch of thetheory, the evolution of one of its concepts,
2、or a problem that runs throughits development. Others are original pieces of work that are signicant togame theory as a whole.After taking the reader through a concise history of game theory, thecontributors discuss such topics as: the connections between Von Neumanns mathematical game theory andthe
3、 domain assigned to it today since Nash the strategic use of information by game players the problem of the coordination of strategic choices between independ-ent players in non-cooperative games cooperative games and their place within the literature of games incentive and the implementation of a c
4、ollective decision in game-theoretic modeling team games and the implications for rms management.The nature of the subject and the angle from which it is examined will ensurethat Game Theory and Economic Analysis reaches a wide readership. As anestablished scholar in the area of game theory, Christi
5、an Schmidt has pro-duced an authoritative book with contributions from economists of the veryhighest rank and prole, some of them well known beyond the boundaries ofthe game-theoretic community.Christian Schmidt is Professor at the University of Paris-Dauphine. He hasrecently published La thorie des
6、 jeux: essai dinterprtation (PUF, 2001). 1995 ditions DallozEnglish edition: editorial matter and selection 2002 ChristianSchmidt; individual chapters the contributorsRoutledge Advances in Game TheoryEdited by Christian Schmidt1 Game Theory and Economic AnalysisA quiet revolution in economicsEdited
7、by Christian Schmidt 1995 ditions DallozEnglish edition: editorial matter and selection 2002 ChristianSchmidt; individual chapters the contributorsGame Theory and EconomicAnalysisA quiet revolution in economicsEdited by Christian SchmidtLondon and New York 1995 ditions DallozEnglish edition: editori
8、al matter and selection 2002 ChristianSchmidt; individual chapters the contributorsFirst published in French in 1995 asThorie des jeux et analyse conomique 50 ans aprs (special issue ofRevue dEconomie Politique, 1995, no. 4, pp. 529733)by ditions Dalloz (Paris)This edition published 2002by Routledge
9、11 New Fetter Lane, London EC4P 4EESimultaneously published in the USA and Canadaby Routledge29 West 35th Street, New York, NY 10001Routledge is an imprint of the Taylor individual chapters the contributorsAll rights reserved. No part of this book may be reprinted orreproduced or utilized in any for
10、m or by any electronic,mechanical, or other means, now known or hereafterinvented, including photocopying and recording, or in anyinformation storage or retrieval system, without permission inwriting from the publishers.British Library Cataloguing in Publication DataA catalogue record for this book
11、is available from the British LibraryLibrary of Congress Cataloging in Publication DataGame theory and economic analysis / edited by Christian Schmidt.p. cm. (Routledge advances in game theory; 001)Includes bibliographical references and index.1. Game theory. 2. Economics. I. Schmidt, Christian. II.
12、Series.HB144.G3727 2002330.015193 dc21 2001056890ISBN 0415259878This edition published in the Taylor individual chapters the contributorsContentsList of contributorsIntroductionCHRISTIAN SCHMIDTPART IHistorical insight1 Von Neumann and Morgenstern in historical perspectiveROBERT W. DIMAND AND MARY A
13、NN DIMAND2 Rupture versus continuity in game theory: Nash versus VonNeumann and MorgensternCHRISTIAN SCHMIDTPART IITheoretical content3 Blu and reputationSYLVAIN SORIN4 An appraisal of cooperative game theoryHERV MOULIN5 The coalition concept in game theorySBASTIEN COCHINARD6 Do Von Neumann and Morg
14、enstern have heterodox followers?CHRISTIAN SCHMIDT 1995 ditions DallozEnglish edition: editorial matter and selection 2002 ChristianSchmidt; individual chapters the contributors7 From specularity to temporality in game theoryJEAN-LOUIS RULLIRE AND BERNARD WALLISERPART IIIApplications8 Collective cho
15、ice mechanisms and individual incentivesCLAUDE DASPREMONT AND LOUIS-ANDR GRARD-VARET9 Team models as a framework to analyze coordination problemswithin the rmJEAN-PIERRE PONSSARD, SBASTIEN STEINMETZ, ANDHERV TANGUY 1995 ditions DallozEnglish edition: editorial matter and selection 2002 ChristianSchm
16、idt; individual chapters the contributorsContributorsSbastien Cochinard. LESOD, University of Laon, France.Claude dAspremont. CORE, Catholic University of Louvain, France.Mary Ann Dimand. Albion College, Michigan, USA.Robert W. Dimand. Brock University, Canada.The late Louis-Andr Grard-Varet. Univer
17、sities of Aix-Marseilles II and III,France.Herv Moulin. Rice University, Texas, USA.Jean-Pierre Ponssard. Laboratoire dEconomtrie, Ecole Polytechnique,Paris, France.Jean-Louis Rullire. University of Lyons Lumire 2, France.Christian Schmidt. University of Paris-Dauphine, Paris, France.Sylvain Sorin.
18、Laboratoire dEconomtrie, Ecole Polytechnique, Paris,France.Sbastien Steinmetz. INRA, France.Herv Tanguy. INRA, France.Bernard Walliser. HESS, Ecole Nationale des Ponts et Chausses, France. 1995 ditions DallozEnglish edition: editorial matter and selection 2002 ChristianSchmidt; individual chapters t
19、he contributorsIntroductionChristian SchmidtGame theory has already observed the passage of its ftieth birthday; that is,if one accepts the conventional chronology which places its birth at the publi-cation of Theory of Games and Economic Behavior (TGEB) by Von Neumannand Morgenstern (1944). This an
20、niversary evidently did not escape the noticeof the Academy of Stockholm, which in 1994 awarded the Nobel Prize inEconomic Sciences to three game theorists, Nash, Harsanyi, and Selten. Alook back at its brief history brings out several troubling similarities witheconomic science, in places where one
21、 might not expect to nd them.Game theory was invented in order to satisfy a mathematical curiosity. Thediculty at the outset was to nd a theoretical solution to the problems posedby uncertainty in games of chance. The example of checkers interestedZermelo (1913), and then the rst complete mathematic
22、al formulation ofstrategies for games “in which chance (hasard) and the ability of the playersplays a role” was sketched out by Borel (1924), who was himself co-author ofa treatise on bridge. Nothing about this singular and rather marginal branchof mathematics would at this time have suggested its l
23、ater encounter witheconomics.1The analogy between economic activity and what goes on incasinos was only suggested much later, in a far dierent economic environ-ment than that which these two mathematicians would have been able toobserve.One could say that J. Von Neumann was the person who both confe
24、rred asense of scientic legitimacy upon this mathematical construction, and whosework would lead to the connection with economic analysis.2The principalstages were as follows:1928: Von Neumann demonstrates his minimax theory. This demonstra-tion occurs within the framework of a category of two-perso
25、n zero-sumgames in which, to use Borels terminology, chance (hasard) plays nopart, at least no explicit part, and in which the results depend solely uponthe reason of the players, not upon their ability. “Strategic games” lendthemselves naturally to an economic interpretation (Von Neumann 1928)1937:
26、 Pursuing his topological work on the application of the xed-pointtheorem, Von Neumann discovers the existence of a connection between 1995 ditions DallozEnglish edition: editorial matter and selection 2002 ChristianSchmidt; individual chapters the contributorsthe minimax problem in game theory and
27、the saddle point problem asan equilibrium in economic theory (Von Neumann 1937)1940: Von Neumann chooses the economist O. Morgenstern to assist himin the composition of what would become the rst treatise of gametheory. The title of their work is explicit: the theoretical understanding ofgames is pre
28、sented as relevant to the analysis of economic behavior.However seductive it may seem, this saga is nonetheless deceptive. To look alittle closer, the bonds that connect Von Neumanns mathematical thought toeconomic theory are more fragile, and partially contingent. The applicabilityof strategic game
29、s, in the sense of the 1928 article, is obviously not limited tothe domain of economics. The connection between the minimax theorem andthe saddle point is the result of a property of convexity, independent of anyeconomic interpretation of it that might be given. The reasons for Von Neu-manns collabo
30、ration with Morgenstern go beyond the realm of science.Finally and above all, their work together did not in fact culminate in theannounced fusion of game mathematics and the analysis of economic situ-ations. Two-thirds of Theory of Games and Economic Behavior are devoted tozero-sum games, and non-z
31、ero-sum games are handled with recourse to thedevice of the “ctitious player.” As for Bhm-Bawerks famous example ofthe horse market, it represents a particular economic situation that oersonly a fragile support for the theoretical result it illustrates. One need onlychange the numerical givens in th
32、e auction market bearing on substitutablebut indivisible goods (the horses), and one can demonstrate that the “core” ofthe allocations is empty (cf. Moulin, this volume: Chapter 4).Contemporaries were not fooled. As evidenced by the long articles thatfollowed the publication of this massive work, ec
33、onomists did not respond toVon Neumanns and Morgensterns hopes (cf. Dimand and Dimand, thisvolume: Chapter 1). Indeed, over the course of twenty years, game theorywould remain above all, with only a few exceptions, either an object of studyfor a small group of mathematicians, or a research tool for
34、military strat-egists. The rst category, working with Kuhn and Tucker at Princeton, wouldrene, deepen, and generalize the formal properties of the theory left behindby Von Neumann. The second category, which beneted from substantialmilitary funding, worked particularly in connection with the Rand Co
35、rpor-ation to apply these concepts to new strategic realities by linking them tooperational research. A last group of applied mathematicians workingaround the University of Michigan tried to create a bridge between the stat-istical approach of decision-making theory and the new theory of gamesthroug
36、h experimental tests. Among them, emerged the names of Thomsonand Raia.But the most suggestive aspect of this history is probably the behavior ofVon Neumann himself. Working with the Manhattan project, and having leftPrinceton, he looked skeptically upon applications of game theory to eco-nomics. Sh
37、ortly before his premature death in 1957, he formulated a critical 1995 ditions DallozEnglish edition: editorial matter and selection 2002 ChristianSchmidt; individual chapters the contributorsjudgment which went beyond a simple statement of facts. According to him,there were more than just empirica
38、l diculties standing in the way of thedevelopment of such applications. The application of game theory to eco-nomics posed a more fundamental problem due to the distance separatingseveral major concepts articulated in Theory of Games and EconomicBehavior (rules of the game, game solution, coalition,
39、 etc.) from the categoriesconstructed by economic analysis.3Whatever the case, the small group ofeconomists who persisted in working on games found themselves faced withserious diculties. In particular, they had to free themselves from the hypoth-esis of the transferability of utilities: they had to
40、 introduce a dynamic intowhat had been an essentially static treatment of the interactions between theplayers, and they had to abandon the unrealistic framework of completeinformation.A third point of view on the relations between game theory and economictheory would modify matters further. The publ
41、ication of Nashs profoundlyinnovative articles in the early 1950s quickly refreshed the thinking ofthose few economists who had been seduced by game theory, and thereafterthey directed their energies towards retrospective reconstructions. Shubikrediscovered in Cournots work the premises of Nashs con
42、cept of equi-librium (Shubik 1955). Harsanyi compared Nashs model of negotiation witheconomic analyses beginning with Zeuthen and continuing with Hicks (Har-sanyi 1956). Similarities came to light between the problematic of competi-tion laid out by Edgeworth and the laws of the market (Shubik 1959).
43、 Theway was now open for further comparisons. The question could be asked, forinstance, whether Shapleys solution did not simply develop, in axiomaticform, several of the ideas suggested by Edgeworth in his youthful utilitarianphase.4Those works are to be considered as a starting point for a kind of
44、archaeology. In the train of these discoveries, a hypothesis took shape. Aneconomic game theory perhaps preceded the mathematical theory elaboratedby Von Neumann (Schmidt 1990). It is surely not by chance that several ofthe problems posed by the application of game theory to economics wereresolved i
45、n the 1960s by the very scholars who had been the most active inresearching the economic roots of game theory. One thinks particularly ofthe work of Shubik, Harsanyi, Shapley, and Aumann.In the light of these new developments, the role of the Hungarian math-ematical genius in this aair appears more
46、complex. While he remains theundeniable intermediary between the mathematics of games and economics,it is necessary also to recognize that he has contributed, through the orienta-tion he gave to his theory (zero-sum games with two players, extension to nplayers and, only nally, to non-zero-sum games
47、 through several ctions), toeclipsing the old strategic approach to economic problems, a tradition illus-trated by often isolated economists going back to the nineteenth century. It istrue that the tradition always remained hopelessly foreign to his economistcollaborator Morgenstern, who was educate
48、d in a quite dierent economicdiscipline, namely the Austrian school. 1995 ditions DallozEnglish edition: editorial matter and selection 2002 ChristianSchmidt; individual chapters the contributorsAt the end of the 1970s, the connections between game theory and eco-nomics entered a new phase. The game
49、 theory approach had progressivelyinvaded the majority of sectors of economic analysis. Such was the case rstof all with industrial economy, which was renewed by the contribution ofgames. Insurance economics, then monetary economics and nancial eco-nomics and a part of international economics, all, one by one, were marked bythis development. The economy of well-being and of justice have beenaected, and more recently the economics of law. It
