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am 1. Juni 2000
This book is a solid introduction both to game theoretic reasoning and its application in legal analysis. It does a nice job of serving two audiences: lawyers and legal scholars who want to see some game theory and how it can illuminate analysis of things like liability regimes, and game theorists/economists/formal political scientists who are interested in a novel application of game theory. (Well, I'm only the second audience, but it seems like the first would be well served also.)
The book is very verbal. I believe there are two equations in it, in all (but of course many game matrices). So for legal scholars it can be a useful introduction to what game theory has to say, but it can't give much guidance on how to build a model. Given the importance of spreading these ideas, the non-technical nature is probably a plus.
The authors deserve credit for covering a lot of ground in game theory, much of it seemingly impossible to understand without the math, with minimal technical investment. Most basic topics that might be covered in a graduate course for economists are treated -- albeit at an intuitive level, but one that is very understandable.
A couple drawbacks come to mind. First, the authors do not stress enough the knowledge assumptions behind Nash equilibrium. It requires not just that everyone be rational or that everyone know that everyone is rational. It requires *common knowledge* of rationality -- that everyone knows that everyone knows that everyone knows...(ad infinitum)...that everyone is rational. That is *much* stronger and more limiting than mutual knowledge of rationality, and it's important to understand what you ingest upon swallowing Nash equilibrium. Moreover, there is not enough discussion of solution concepts, like correlated equilibrium, that subsume wide possibilities of communication or even implicit contract signing, which seems important, given the nature of the book. Ch. 6 of Myerson's _Game Theory_ would be a useful supplement here, but it's a lot more technical.
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