preface

Chapter 1: Why is "Game Theory" receiving so much attention now?

Is the game theory boom here?
What is game theory?
The role of game theory in academic fields
Why Game Theory Now? ①
―Theoretically explains social and economic phenomena.
Why Game Theory Now? ②
―Many problems can be solved with a few principles.
Why Game Theory Now? ③
-Learn rationalism and individualism
Why Game Theory Now?④
―A means of explaining international society and intercultural exchange
Why Game Theory Now?⑤
Strategic thinking that considers the actions the opponent will take
Why Game Theory Now?⑥
―The difference between social science and natural science

Chapter 2: Fundamentals of Game Theory: Simultaneous and Sequential Games

Is it a simultaneous game or a sequential game?
The three elements that make up a simultaneous game
Example of a simultaneous game ① Weekly A vs. Weekly B PART 1 - Feature article competition
Let's analyze it using a conservative matrix.
Let's find the "dominant strategy"—the strategy with absolute advantage.
The outcome of the game = the solution to the game
Example of a simultaneous game ② - Sanpei and Louise
What if only one side has a dominant strategy?
From whose perspective do you think the game will be played?
Simultaneous Game Example ③ - Weekly A vs. Weekly B Part 2
What is Nash Equilibrium?
The result reached after analysis
The solution to the game is determined by the Nash equilibrium!
Sequential Game Example ① - Weekly A vs. Weekly B Part 3
Sequential games are thought of as "game trees"
The thinking is the same for both sequential and simultaneous games.
Let's think of it as a "prediction"
Game solution in sequential games
Backward induction to obtain "predictions"
Strategies and Nash Equilibrium in Sequential Games

Chapter 3: Keyword Analysis of Game Theory

Keywords that can be solved with basic game theory
Building investment competition
Let's change the game!
Promises - You gain an advantage by restricting yourself?!
Will the first mover have the advantage, or will the second mover have the advantage?
What is an incentive?
Case studies of incentive and contract problems
Incentive contracts - performance-based and fixed-rate
Think about your negotiating power
Negotiation Factors ①: Options, Breakdown Points, and Benefits
Seizing the Ultimatum—How to Extract Concessions at the Threat
Total social surplus and its distribution
Market principles and redistribution of surplus
auction
competition
Competitive Bidding—Eliminating Repeated Inferiority Strategies
The Year of the Competitive Bidding Game
Internet auctions and automated bidding
second-price bidding system
Prisoner's Dilemma - Environmental Pollution in Two Countries as an Example
The origin of the prisoner's dilemma
An example of the prisoner's dilemma

Chapter 4: Strategic Thinking in Slightly Advanced Game Theory

A hybrid of sequential and simultaneous games
Subgame and Subgame Perfect Equilibrium
Solve the prisoner's dilemma by changing the game.
Consider the order of decision making: the paradox of voting and strategic voting.
The Paradox of Voting
Strategic Voting Game
The value of 10,000 yen today and 10,000 yen one year from now
Discount rates and bargaining power
Bargaining power in the mutual offer game
Repeat game
We cannot cooperate as long as there is a prediction.
An "infinite" repetitive game that doesn't "predict"
Trigger strategy
Achieving cooperation and fork resolution
Axelrod's Experiment and Retaliatory Strategy
Bounded Rationality and Experimental Economics
Sports Strategy and Game Theory
Games without Nash equilibrium
Find the solution to the game with expectations in mind
Think of the worst and make the best of it
Minimax strategy and zero-sum game
The essence of strategic thinking

Chapter 5: Examining Uncertainty and Information through Game Theory

Game theory in uncertain situations
Expectations, Expected Amount and Risk
Expected Compensation - Expected Compensation
The Relationship Between Risk Aversion and Diminishing Marginal Utility
moral hazard
Causes and Incentives of Moral Hazard
Incentive Contracts and Moral Hazard
Risk aversion and incentive contracts
principal and agent theory
Incentives are provided through a fixed amount + performance-based bonus.
Adverse selection - you can't know your opponent's "attributes"
A model of adverse selection: wages based on ability differences
Incomplete information game
Information sets and beliefs
Coherent Beliefs - Guessing in Uncertain Situations and the Other Person's Behavior
Bayesian Nash Equilibrium and the Results of Adverse Selection
The Role of "Certification" in the Context of Information Asymmetry
Signal sending game
Solve the signal sending game
The Year of the Signaling Game
The cost of sending a signal is important
Game Theory of Information and Risk—A Complete Summary

Chapter 6: The Pervasiveness of Game Theory: Current Research Topics

The fox's paradox
Bounded Rationality Approach to Game Theory
evolutionary game theory
Experimental Economics and Behavioral Game Theory
Another game theory - cooperative game theory

Conclusion
index

Game theory is a technique that suggests optimal solutions to any situation, from small problems in everyday life to global issues.
Most people have probably heard of game theory, but few people actually apply it in real life, except for those in professional occupations.
The reality is that even people who have learned game theory are unable to properly apply it to various decision-making situations in daily life.
This is because most books either deal with game theory as a serious academic discipline or introduce it lightly to the general public, making the former too difficult for readers, while the latter can only be understood.

To help anyone easily catch two birds with one stone—theory and practice—this book provides comprehensive knowledge of game theory, from its inception to its current application and in-depth theory, with a variety of case studies and helpful illustrations.
Rather than simple, spoon-fed explanations, the detailed and clear explanations, which aim for thorough conceptual understanding, and the intuitive pictorial materials will help you more easily recognize the principles visually.
In addition, we have included a number of simple problems so that readers can experience game theory firsthand. Through this, readers of this book will not only gain a deep understanding of game theory but also the practical skills to apply it directly to real life.