A Game-Theoretic Approach to Political Economy

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This companion volume to Shubik's masterful Game Theory in the Social Sciences sketches a unification of several branches of political economy on the basis of the theory of games.In five parts it covers basic factors that make economic decision making different from properties of economic goods, money, and wealth - static, one-sided, open model of oligopolistic competition; cooperative models of closed economic systems; strategic models of closed economic systems, and externalities and public goods. This final section explores a number of applications, including land ownership, voting, and the assignment of joint costs.The book concludes with an outline of a series of games within a game as a portrayal of a politico-economic process in a democratic society with a two-party system and public and private sectors. The approach adopted points the way toward a possible reconciliation of micro-and macroeconomics and an integration of economic, political, and sociological descriptions in the study of the short-term function of the state.Martin Shubik is Seymour H. Knox Professor of Mathematical Institutional Economics at Yale University.