Game Theory and Public Policy

Game theory is useful in understanding collective human activity as the outcome of interactive decisions. In recent years it has become a more prominent aspect of research and applications in public policy disciplines such as economics, philosophy, management and political science, and in work within public policy itself. Here Roger McCain makes use of the analytical tools of game theory with the pragmatic purpose of identifying problems and exploring potential solutions in public policy.

In practice, the influence of game theory on public policy and related disciplines has been less a consequence of broad theorems than of insightful examples. Accordingly, the author offers a critical review of major topics from both cooperative and noncooperative game theory, including less-known ideas in noncooperative game theory and constructive proposals for new approaches. In so doing, he provides a toolkit for the analysis of public policy as well as a clearer understanding of the public policy enterprise itself.

The author's unique approach and treatment of game theory will be a useful resource for students and scholars of economics and public policy, as well as for policymakers themselves.

Contents: Part I: Historical and Critical Survey; 1. Objectives and Scope of the Book; 2. Representing Games; 3. A Brief Interpretive History of Game Theory; 4. Nash Equilibrium and Public Policy; 5. Correlated Equilibrium; 6. Non-cooperative Sequential Games and Public Policy; 7. Social Mechanism Design; 8. Superadditive Games in Coalition Function Form; 9. Imperfect Recall and Aggregation of Strategies; 10. Strategy, Externality, and Rationality; Part II: Encapsulated Cooperation; 11. Coalition Formation and Stability; 12. Bargaining, Weak Dynamics, and Consensus; 13. Formal Aspects of Games in Partition Function Form; 14. Coalitional Play; 15. The Government Game; 16. Toward Political Economy; References; Index