I think a basic overview of game theory should also discuss Pareto optimality to some extent. You can have 100% of participants operating in a locally-ideal way while still creating problems in aggregate.
Pareto optimal is definitely a core concept in game theory. It says that no other vector beats it in every dimension (or at least as good in all but one, and better in at least one).
Why Flip a Coin is a really great book about game theory. Easy to read, very little assumed knowledge, and lots of very interesting and counterintuitive examples and situations. Also, despite the introductory nature - still gets into the math in a rigorous way.
I think a basic overview of game theory should also discuss Pareto optimality to some extent. You can have 100% of participants operating in a locally-ideal way while still creating problems in aggregate.
Tragedy of the commons / bounded rationality for example.
https://en.wikipedia.org/wiki/Tragedy_of_the_commons
Pareto efficiency is a welfare economics concept. In game theory, the closest you can get to that is a Nash equilibrium.
Pareto optimal is definitely a core concept in game theory. It says that no other vector beats it in every dimension (or at least as good in all but one, and better in at least one).
Why Flip a Coin is a really great book about game theory. Easy to read, very little assumed knowledge, and lots of very interesting and counterintuitive examples and situations. Also, despite the introductory nature - still gets into the math in a rigorous way.
Thanks for the recommendation!
I second that!