For an accessible progressive book that delves into game theory (and also uses micro theory), some might be interested in Tom Slee, "No One Makes You Shop at Wal-Mart." I liked it. He has a blog too.
On Tue, Sep 27, 2011 at 12:37 PM, SA <s11131978 at gmail.com> wrote:
> On 9/27/2011 12:03 PM, Ferenc Molnar wrote:
>
> Has Game Theory been applied to economics in a meaningful and useful way?
>> Would you characterize the people working in this field as left or right or
>> somewhere in between? Not a leading question. I'm completely in the dark on
>> the entire subject.
>>
>
> I'm sure others will know more than me about this, but the short answer is
> yes, game theory has been applied to a lot of topics in economics. For
> example, in industrial organization (the study of individual industries and
> market structure), the state of the art seems to be that in big,
> oligopolistic industries, prices are indeterminate (i.e. not determined by
> marginal cost, etc.) because they depend on whether big firms can or cannot
> maintain tacit cooperation to restrict output and keep prices high. These
> tacit interactions between firms are analyzed using game theory. Is this
> left wing? No, not really, but it is arguably subversive of the right wing's
> favorite picture of the economy, where price equals marginal cost and
> everything is for the best in the best of worlds. In fact, game theory can
> be said to be generally subversive of the right wing economic vision, for
> the following reason. The Right's foundational moral/political
> interpretation of the market consists of this syllogism: the market is
> always optimal because every transaction is voluntary, therefore no
> transaction will ever happen unless it makes both parties better off. Game
> theory totally subverts that idea, because it shows how individual decisions
> are interdependent, and therefore, both parties can rationally "freely
> choose" things that end up making them both worse off, as in the prisoner's
> dilemma. The ideal solution in game theory is usually coordination, which,
> to prevent free-riding, requires constraint on individual choices. Sam
> Bowles or Herb Gintis (I forget which one) wrote a book recently arguing for
> some kind of grand unification of the social sciences based on game theory.
> They're certainly left-wing. (Unless you want to be crabbily sectarian about
> it.)
>
> SA
>
>
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