Skill Track
Game Theory & Strategic Thinking
Game theory provides rigorous frameworks for analyzing strategic interactions where outcomes depend on the choices of multiple actors. From auction design to competitive strategy to market microstructure, these tools are essential for understanding how rational agents behave in complex environments.
Foundational Texts
Theory of Games and Economic Behavior
John von Neumann & Oskar Morgenstern, 1944
The book that founded game theory as a mathematical discipline. Introduces utility theory, zero-sum games, and cooperative game theory. Technically demanding but historically essential.
Read on Internet ArchiveA Beautiful Mind
Sylvia Nasar
The biography of John Nash, whose equilibrium concept revolutionized game theory and won the Nobel Prize. An accessible entry point to understanding Nash's contributions and their significance.
View on Amazon (Simon & Schuster)Textbooks
An Introduction to Game Theory
Martin J. Osborne
A clear, well-organized undergraduate textbook covering strategic games, extensive games, Bayesian games, and repeated games. Excellent balance of accessibility and rigor.
View on Amazon (Oxford University Press)Game Theory
Drew Fudenberg & Jean Tirole
The definitive graduate-level textbook. Comprehensive coverage of non-cooperative and cooperative game theory, including mechanism design. The standard reference for economists.
View on Amazon (MIT Press)Game Theory: Analysis of Conflict
Roger Myerson
Nobel laureate Myerson's graduate textbook with particular strength in mechanism design and Bayesian games. Rigorous treatment with economic applications.
View on Amazon (Harvard University Press)Game Theory
Giacomo Bonanno - 3rd Edition 2024
A freely available textbook covering strategic-form games, extensive-form games, and games with incomplete information. Excellent resource with clear exposition.
Download Free PDFAccessible Introductions
Thinking Strategically
Avinash Dixit & Barry Nalebuff
A popular introduction to game theory concepts using real-world examples from business, politics, and everyday life. Minimal math, maximum insight.
View on Amazon (W.W. Norton)The Art of Strategy
Avinash Dixit & Barry Nalebuff
A revised and expanded version of Thinking Strategically with updated examples and additional material on behavioral economics.
View on Amazon (W.W. Norton)Game Theory 101
William Spaniel
An accessible introduction with a popular YouTube lecture series. Great for visual learners and those who prefer video instruction.
View on AmazonBehavioral & Experimental
Thinking, Fast and Slow
Daniel Kahneman
Nobel laureate Kahneman's summary of decades of research on cognitive biases and heuristics. Essential for understanding how real humans deviate from game-theoretic rationality assumptions.
View on Amazon (Farrar, Straus and Giroux)Predictably Irrational
Dan Ariely
Behavioral economist Ariely explores systematic ways humans deviate from rational decision-making. Accessible and entertaining with important implications for game theory in practice.
View on AmazonMisbehaving
Richard Thaler
Nobel laureate Thaler's intellectual autobiography chronicles the development of behavioral economics and its challenge to traditional rational-actor models.
View on AmazonKey Concepts
Nash Equilibrium
A strategy profile where no player can improve by unilaterally changing their strategy. The central solution concept in non-cooperative game theory.
Prisoner's Dilemma
The canonical game illustrating how individual rationality can lead to collectively suboptimal outcomes. Fundamental to understanding cooperation problems.
Mechanism Design
Designing rules and incentives to achieve desired outcomes when agents have private information. Underlies auction design, market design, and contract theory.
Auction Theory
Analysis of different auction formats and bidding strategies. Directly applicable to IPOs, spectrum auctions, and asset sales.
Applications to Finance
Market Microstructure
Game theory explains how market makers, traders, and exchanges interact. Understanding bid-ask spreads, order flow, and price discovery as strategic interactions.
Corporate Strategy
Analyzing competitive dynamics, entry deterrence, and pricing strategies. How firms interact in oligopolistic markets.
Negotiation & Deal-Making
Bargaining theory informs M&A negotiations, labor contracts, and investor relations. Understanding BATNA, commitment devices, and signaling.
IPO & Auction Design
Book-building, Dutch auctions, and allocation mechanisms for new securities. Game theory determines optimal auction formats.
Technology Integration
Computational Game Theory
Python enables you to simulate games, compute equilibria, and analyze strategic interactions programmatically. Libraries like Nashpy and Gambit provide game-theoretic tools.
Automate the Boring Stuff (Free)AI & Strategic Interaction
Reinforcement learning and multi-agent AI systems are creating new approaches to game theory. AI systems now excel at complex strategic games, from poker to diplomacy.