Game Theory Applications in Economics and Social Sciences

Abstract

Game theory: game theory offers a formal and mathematical language in which we can model strategic interaction among agents in a situation that their payoffs are depending on the choices of other agents. Originating in economics, it has now spread to political science, sociology, psychology, law and computer science. This article sees over static and dynamic games, cooperative and non-cooperative games, complete and incomplete information games, some major results (empirical and experimental), as well as demonstrating methods employed to apply game theory to the problems of market design, public goods, voting and political bargaining behavior, social norms, and networked behavior. A mixed qualitative-analytical methodology is used, including the use of canonical models, laboratory and field experiments and their use of applied case studies. Data analysis is a means of synthesizing the empirical regularities across domains and drawing attention to where the theory has worked and where refinements of behavioral analysis must be made. The paper ends with policy relevant recommendations and directions for research.