Game theory in its several variants can be viewed as a major contribution to multi-agent modeling, with widespread applications in economics and the other social sciences. One development of classical game theory, Generalized Game Theory (GGT), entails its extension and generalization through the formulation of the mathematical theory of rules and rule complexes and a systematic grounding in contemporary social sciences. Social theory concepts such as norm, value, belief, role, social relationship, and institution as well as game can be defined in a uniform way in terms of rules and rule complexes. Such a conceptual toolbox enables us to model social interaction taking into account economic, socio psychological, and cultural aspects as well as incomplete or imprecise or even false information.

The article presents foundation and applications of GGT, among others: (1) GGT provides a cultural/institutional basis for the conceptualization and analysis of games in their social context, showing precisely the ways in which the social norms, values, institutions, and social relationships come into play in shaping and regulating game processes. (2) It formulates the concept of judgment as the basis of action determination. (3) GGT distinguishes between open and closed games. The structure of a closed game is fixed; in open games, actors have the capacity to transform game components such as the role components or the general “rules of the game”. Rule formation and re-formation is, therefore, a function of interaction processes. (4) GGT reconceptualizes the notion of “game solution as well as equilibrium. Some “solutions” envisioned or proposed by actors with different frameworks and interests are likely to be contradictory or incompatible. Under some conditions, however, players may arrive at “common solutions” which are the basis of game equilibria. (5) The theory distinguishes different types of game equilibria, such as instrumental, normative, social and so forth. (6) While GGT readily and systematically incorporates the principle that human actors have bounded factual knowledge and computational capability, it emphasizes their extraordinary social knowledge ability and competence: in particular, their knowledge of diverse cultural forms and institutions such as family, market, government, business or work organization, and hospitals, among others, which they bring to bear in their social relationships and game interactions.

In concluding, the paper provides a scheme comparing and contrasting GGT and classical game theory on a number of central theoretical dimensions.