Properties of indirect utility functions and expenditure functions. 2. Game Theory and Strategic Interaction
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His obsession had started with the Kuhn-Tucker conditions. He began seeing the world through the lens of constrained optimization. When he chose a seat in the cafeteria, he wasn’t just sitting down; he was solving for the optimal distance between the noise of the kitchen and the proximity to the exit. When he fell in love with Clara, a fellow PhD student, he found himself mentally drafting a game-theoretic model of their relationship. Was their partnership a Pareto improvement? Could they reach a Nash Equilibrium where neither had an incentive to deviate from their Friday night movie ritual?
Moving beyond perfect competition, the text analyzes strategic behavior in concentrated markets.