Game Theory (2011)
Course number: ECO290E
Instructor: Yosuke YASUDA (yosuke.yasuda@gmail.com) Term / Time / Room: Winter / Wed. 9:00‐12:00 / 5J
Course web: https://sites.google.com/site/yosukeyasuda/Home/teaching/game11 Office Hours: Wed. 14:30‐16:30 (my office is C‐911)
1. Course Description
This is an introductory course in game theory, which will provide you with mathematical tools for analyzing strategically interdependent situations, i.e., the situations in which your optimal decision depends on what other people will do. In particular, we will study central solution concepts in game theory such as Nash equilibrium, subgame perfect equilibrium, and Bayesian equilibrium. To illustrate the analytical value of these tools, we will cover a variety of applications, e.g., international relations, business competition, auctions, marriage market, and so forth. There is no prerequisite for this course, although some background on microeconomics and familiarity of probabilistic thinking would be helpful.
2. Course Outline
1: Introduction and motivation 2: Static games and Nash equilibrium
3: Why and how is Nash equilibrium reached? 4: Applications of static games
5: Mixed strategy equilibrium
6: Dynamic games and backward induction 7: Midterm exam (90 minutes, 50 points) 8: Games in extensive‐form
9: Applications of dynamic games 10: Bargaining
11: Repeated games
12: Static games of incomplete information 13: Applications of incomplete information games 14: Behavioral game theory
15: Review session
16: Final exam (90 minutes, 50 points)
3. Grading
Course grade will be determined by combining grades on a midterm exam (50%) and a final exam (50%). There is no take‐home assignment.
4. Textbooks
There is NO official textbook for the class. While lecture notes will be the main material for the class, the following textbook is recommended for those who need supplementary readings.
Robert Gibbons, Game Theory for Applied Economists, 1992
A useful text at roughly the same level as Gibbons, but contains variety of examples, is:
Martin Osborne, An Introduction to Game Theory, 2004
The following introductory textbooks contain full of intuitive explanations:
Avinash Dixit, Susan Skeath, and David Reiley, Games of Strategy, 3rd, 2009 Joseph Harrington, Jr. Games, Strategies, and Decision Making, 2008
Those of you interested in pursuing the subject further may consult the following advanced and authoritative sources.
Drew Fudenberg and Jean Tirole, Game Theory, 1991 Roger Myerson, Game Theory, 1991
Martin Osborne and Ariel Rubinstein, A Course in Game Theory, 1994
(You can download it for free: http://theory.economics.utoronto.ca/books/)
The following books contain many examples of game theory in action, both in business and in everyday life.
Avinash Dixit and Barry Nalebuff, The Art of Strategically, 2008
The old version titled with Thinking Strategically (1991) is also recommended. Preston McAfee, Competitive Solutions, 2002
John McMillan, Games, Strategies, and Managers, 1992
Finally, the following recent textbook provides a lively introduction to the game‐theoretic perspective on economic development, which may especially attract your interests.
Bruce Wydick, Games in Economic Development, 2007
