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1、Chapter1Introduction1.1WHATISGAMETHEORY?We,humans,cannotsurvivewithoutinteractingwithotherhumans,andironically,itsome-timesseemsthatwehavesurviveddespitethoseinteractions.Productionandexchangerequirecooperationbetweenindividualsatsomelevelbutthesameinteractionsmayals
2、oleadtodisastrousconfrontations.Humanhistoryisasmuchahistoryoffightsandwarsasitisahistoryofsuccess-fulcooperation.Manyhumaninteractionscarrythepotentialsofcooperationandharmonyaswellasconflictanddisaster.Examplesareabound:relationshipsamongcouples,siblings,countries,ma
3、nagementandlaborunions,neighbors,studentsandprofessors,andsoon.Onecanarguethattheincreasinglycomplextechnologies,institutions,andculturalnormsthathaveexistedinhumansocietieshavebeenthereinordertofacilitateandregulatetheseinteractions.Forexample,internettechnologygrea
4、tlyfacilitatesbuyer-sellertransactions,butalsocomplicatesthemfurtherbyincreasingopportunitiesforcheatingandfraud.Workersandmanagershaveusu-allyopposinginterestswhenitcomestowagesandworkingconditions,andlaborunionsaswellaslaborlawprovidechannelsandrulesthroughwhichany
5、potentialconflictbetweenthemcanbead-dressed.Similarly,severalculturalandreligiousnorms,suchasaltruismorreciprocity,bringsomeordertopotentiallydangerousinteractionsbetweenindividuals.Allthesenormsandinstitutionsconstantlyevolveasthenatureoftheunderlyinginteractionskeep
6、changing.Inthissense,under-standinghumanbehaviorinitssocialandinstitutionalcontextrequiresaproperunderstandingofhumaninteraction.Economics,sociology,psychology,andpoliticalsciencearealldevotedtostudyinghumanbehaviorindifferentrealmsofsociallife.However,inmanyinstance
7、stheytreatindividualsinisolation,forconvenienceifnotforanythingelse.Inotherwords,theyassumethattounderstand12Introductiononeindividual'sbehavioritissafetoassumethatherbehaviordoesnothaveasignificanteffectonotherindividuals.Insomecases,anddependinguponthequestiononeisa
8、sking,thisassumptionmaybewarranted.Forexample,whatasmallfarmerinalocalmarket,sayinMontana,chargesforwheatisnotlikelytohaveaneffecto