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Coordination games. Complementarities and macroeconomics. (English) Zbl 0941.91018

Cambridge: Cambridge University Press (ISBN 0-521-57896-5/pbk; 0-521-57017-4/hbk). xiv, 163 p. (1999).
This book deals with the macroeconomic meaning and implications of the existence of various kinds of equilibria in economic games. It brings into light theoretical models and carefully done experiments which show how players coordinate their behavior in order to reach efficiently equilibrated decisions. Without being a mathematical book “Coordination games” should be carefully studied by mathematicians interested in game theory. It presents a conceptual framework in which mathematical notions evolve into decision making tools.
After an introduction to complementarities and a discussion of experimental research concerning the outcomes of coordination games, the author studies models of economies with complementarities, economies with imperfectly competitive markets and, the most interesting of all, models emphasizing the role of government in the process of inter-player coordination at macroeconomic level. The elegance of the models and their analysis compensates for the less styled presentation of the mathematics on which some conclusions are based.
The book suggests the need of re-thinking the way in which competition and cooperation are represented in the mathematical game theory. The fact that in competitive economies players tend to coordinate strategic decisions in the name of efficiency blurs the distinction between cooperation and competition so deeply embedded in the mathematical theory of games.
Reviewer: D.Butnariu (Haifa)

MSC:

91A90 Experimental studies
91-02 Research exposition (monographs, survey articles) pertaining to game theory, economics, and finance
91A10 Noncooperative games
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