Game Theory (2014‐15)
Course number: ECO290E
Instructor: Yosuke YASUDA (email@example.com) Term / Time / Room: Winter / Mondays 2nd and 3rd / TBA
Course web: https://sites.google.com/site/yosukeyasuda/Home/teaching/game14
1. Course Description
This is an introductory course in game theory, which will provide you with mathematical tools for analyzing strategic situations ‐ 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. Game theory has been widely recognized as an important analytical tool in such fields as economics, management, political science, phycology and biology. To illustrate its analytical value, we will cover a variety of applications that include international relations, development, 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: Static games with continuous strategies 5: Mixed strategy equilibrium
6: Dynamic games and backward induction 7: Midterm exam (80 minutes, 40 points) 8: Games in extensive‐form
9: Applications of dynamic games 10: Repeated games
11: Static games of incomplete information 12: Applications of incomplete information games 13: Behavioral game theory
14: Introduction to market design 15: Final exam (120 minutes, 60 points)
Course grade will be determined by combining grades on a midterm exam (40%) and a final exam (60%). There is NO take‐home assignment.
There is NO official textbook for the class. While lecture notes are the main material for the class, the books listed below might be useful if you need supplementary readings.
The following introductory textbooks contain full of intuitive explanations:
Avinash Dixit, Susan Skeath, and David Reiley, Games of Strategy, 3rd, 2009 Joel Watson, Strategy, 3rd, 2013
If you want to understand game theory in more lucid way, the next two books are recommended. The first one is concise, while the second is more accessible.
Robert Gibbons, Game Theory for Applied Economists, 1992 Steven Tadelis, Game Theory: An Introduction, 2012
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
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. The last one also serves as an introduction to market design.
Adam Brandenburger and Barry Nalebuff, Co‐Opetition, 1996 Avinash Dixit and Barry Nalebuff, The Art of Strategically, 2008 Preston McAfee, Competitive Solutions, 2002
John McMillan, Games, Strategies, and Managers, 1992 John McMillan, Reinventing the Bazaar, 2002
Finally, the following textbook provides a lively introduction to the game‐theoretic perspective on economic development.
Bruce Wydick, Games in Economic Development, 2007