Cooperative microeconomics : a game-theoretic introduction

Detailed Summary of the Book

The book is structured to deliver a clear and systematic understanding of cooperative game theory within the larger realm of microeconomics. It opens with foundational concepts of cooperation in economics, introducing the reader to rules of fairness and the principles underlying collective decision-making processes. Hervé Moulin carefully builds on these ideas through mathematical reasoning, allowing readers to grasp the intuitive and formal concepts of game theory.

The core focus of the book lies in explaining cooperative games, where players do not compete against each other but instead collaborate to achieve mutual benefits. It explores classical solutions such as the Shapley value, the core, the nucleolus, and other allocation rules, each supported by rigorous proofs and practical economic applications. Moulin illustrates these solutions with clarity, balancing between mathematical sophistication and intuitive understanding to engage both professionals and newcomers in the field.

Real-world applications are an essential part of the book’s value. Topics range from auction theory, network sharing, and voting systems to public goods provision and cost-sharing in partnerships. The interplay between equity and efficiency serves as a recurring theme, with the author providing compelling arguments for designing cooperative systems that solve real economic problems fairly and sustainably.

Key Takeaways

• An in-depth exploration of cooperative game theory, highlighting its mathematical basis and real-world relevance.
• Clear explanations of key solution concepts such as the Shapley value, the core, and the nucleolus, complete with step-by-step derivations.
• A balanced discussion on fairness, efficiency, and stability as guiding principles for cooperative solutions.
• Insights into diverse economic applications, from cost-sharing and market design to resource allocation and voting systems.
• A methodological emphasis on linking rigorous theory with practical insights to solve real-life issues in economics and beyond.

Famous Quotes from the Book

"Cooperation is not just about achieving collective goals; it is about doing so in a manner that is fair and sustainable for all participants."

"Economic efficiency does not always demand competition; in many scenarios, cooperation leads to outcomes that are better for every stakeholder."

"The heart of cooperative game theory lies in designing rules and outcomes that balance individual incentives with collective welfare."

Why This Book Matters

“Cooperative Microeconomics: A Game-Theoretic Introduction” stands out as a cornerstone text for anyone seeking to understand the nuanced interplay of fairness, cooperation, and efficiency in economic systems. Cooperative game theory has long been a critical tool in disciplines such as economics, political science, management, and even evolutionary biology, and this book offers a profound look into its applications.

What makes this book significant is its ability to merge theoretical rigor with practical utility. It not only equips readers with the mathematical tools necessary to study cooperative systems but also sparks conversations about equity and justice in collective decision-making. These are questions fundamental to modern economic systems, where issues like income inequality, resource allocation, and collective bargaining require cooperative solutions.

Hervé Moulin’s work is an essential resource for economists, policymakers, and researchers aspiring to create fairer, more efficient, and more stable systems of cooperation. By addressing both abstract theory and real-life applications, this book bridges the gap between academic theory and practical relevance, ensuring its place as a timeless contribution to economic science.