Complex Social and Behavioral Systems

Abstract

Game theory is the study ofdecision problems which involve several individ- uals (the decision-makers or players) interacting rationally. The models of game theory are abstract representations ofa number ofreal-life situations and have applications to economics, political sciences, computer sciences, evolu- tionary biology, social psychology, and law, among others. These applications are also important for the development of the theory, since the questions that emerge may lead to new theoretic results. This volume provides the main features ofGame Theory, covering most of the fundamental theoretical aspects under the cooperative, non-cooperative, and “general” or “mixed” approaches. The cooperative approach focuses on the possible outcomes of the decision-makers’ interaction by abstracting from the actions or decisions that may lead to these outcomes. Specifically, cooperative game theory studies the interactions among coalitions ofplayers. Its main question is: Given the sets of feasible payoffs for each coalition, what payoffwill be awarded to each player? One can take a positive or normative approach to answering this question, and different solution concepts in the theory lead towards one or the other. The non-cooperative approach focuses on the actions that the decision- makers can take. As argued by John von Neumann and Oskar Morgenstern in their famous 1944 book titled Theory ofGames and Economic Behavior, most economic questions should be analyzed as games. Some games are dynamic, stressing the sequential nature of the various decisions that agents can make. Other situations are better modeled as static games. The volume also considers contributions of game theory to mechanism design, which has helped the development ofother key research areas such as auction theory, contract theory, and two-sided matching theory. Given the importance of these areas in game theory and in economics, several chapters are devoted to their study. The reader can also appreciate the many applications of game theory to practical problems in several contributions to this volume. Finally, a section is dedicated to the modeling and simulation paradigm known as agent-based modeling (ABM) that is markedly useful in studying complex systems made up of a large number of interdependent objects. This paradigm is relatively immature, even though commonly applied in a broad spectrum of disciplines (game theory included), thus a clear-cut and widely accepted definition of high-level concepts of agents, environment, interac- tions, and so on is still lacking. This section addresses the epistemological issues related to the agent-based paradigm ofmodeling ofcomplex systems in order to attempt to reach a more general comprehension ofemergent properties which, though ascribed to the definition of a specific application domain, are also universal. The editors wish to thank the authors for their generosity in providing very valuable and timely contributions as well as their high motivation and strong engagement. We would also like to thank the publisher for the positive and straightforward collaboration, especially Meghna Singh and Neha Thapa for their support throughout the production of this volume.