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


Abstract: 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.

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Provider: Federal Reserve Bank of Minneapolis

Part of Series: Staff Report

Publication Date: 1980

Number: 54