Economists’ book introduces newcomers to game theory

Summing up much of their career together, Felix Munoz-Garcia and Ana Espinola-Arredondo, economists in the School of Economic Sciences, recently published a textbook on game theory, a concept that explores how people, firms, and countries make decisions by anticipating the choices of others.
Summing up much of their career together, Felix Munoz-Garcia and Ana Espinola-Arredondo, economists in the School of Economic Sciences, recently published a textbook on game theory, a concept that explores how people, firms, and countries make decisions by anticipating the choices of others.

Life is a game — or at least, most of our decisions can be understood as interactions with other players, from individuals to firms and governments.

Washington State University economists Ana Espinola-Arredondo and Felix Munoz-Garcia have published a student-focused introductory textbook on game theory, which helps readers understand how people make choices while anticipating the decisions of others.

“Game theory is everywhere,” Espinola-Arredondo said. “In essence, it’s the study of interdependence: how our decisions affect others, from a single person on up to companies and nations. It helps put us in the shoes of others and get a better grasp of relationships, interactions, and behavior.”

Game Theory: An Introduction with Step-by-Step Examples” was written to make the concept more accessible to undergraduate- and masters-level students with no prior knowledge of economics. It is inspired by the authors’ intertwined professions as teachers of game theory for nearly 20 years, starting at the University of Barcelona in the early 2000s, next at the University of Pittsburgh, and through their WSU careers, which began in 2008.

“It summarizes the lectures, examples, and slides we’ve developed,” Espinola-Arredondo said.

Munoz-Garcia added that their book addresses a gap.

“Most textbooks are either too introductory, lacking mathematical rigor, or too advanced and geared toward elective PhD courses,” he said. “We wanted to strike a more balanced approach of rigor, intuitive explanations, and step-by-step examples students can use to analyze settings in economics, business, and the social sciences.”

A professor in WSU’s School of Economic Sciences (SES), Munoz-Garcia explores how industrial organization affects polluting industries, natural resources, and markets, examining how firms respond to environmental policy. Fellow professor Espinola-Arredondo researches and teaches environmental economics as well as game theory, exploring profit-enhancing regulations and consumer behavior.

Together, the duo has authored two prior books on microeconomic theory and common-pool resources, which are shared resources such as forests and water systems.

Their new book, “Game Theory,” includes tools and exercises that help readers solve different classes of games, as well as mathematical steps with in-depth explanations. A companion website offers detailed answer keys to practice exercises as well as links to YouTube videos of movie scenes that illustrate typical games. Instructors can also receive a solutions manual with answer keys to all exercises and PowerPoint slides for each chapter.

The text is available in print and online as an e-book at the Springer website.

“This work was a great opportunity to discuss how different decision-making processes can be formalized,” Espinola-Arredondo said. “It’s satisfying because we know this approach will help students in their professional and daily lives. They’ll be better equipped to make important decisions in a systematic way.”

Munoz-Garcia added that the book reflects the two educators’ true passion for teaching.

“We started this long journey in Barcelona and have grown together to become experts in this field at WSU,” he said.

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