A general method of solution for game theory and its relevance for economic theorizing

A general method of solution for game theory and its relevance for economic theorizing

by John B. Bryant

Book 54 of Staff report --

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"According to the folklore of economics, game theory has failed. This paper argues that that is an incorrect interpretation of the game theory literature. When faced with a well-posed problem, game theory provides a solution. When faced with an ill-posed problem, game theory fails to provide a solution. This is, indeed, the best one can hope for from a method of analysis! Further, some suggestions are made for facing game theory with well-posed economic problems"--Federal Reserve Bank of Minneapolis web site.

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