| Lec # | Topics | READINGS |
|---|---|---|
| 1 | Introduction to Game Theory | |
| 2 | Payoffs in Games: Rational Choice Under Uncertainty Expected Utility Theory; Risk Aversion | Kreps, Chapters 3.1-3.3. |
| 3-5 | A More Formal Introduction to Games Extensive Forms and Normal Forms Strategies, Dominant Strategies and Iterative Elimination of Strictly Dominated Strategies Nash Equilibrium Applications of Nash Equilibrium | Extensive Forms and Normal Forms G, Chapters 1.1A and 2.1A. Strategies, Dominant Strategies and Iterative Elimination of Strictly Dominated Strategies G, Chapter 1.1B. Nash Equilibrium G, Chapter 1.1C. Applications of Nash Equilibrium G, Chapter 1.2. |
| 6-8 | Backward Induction and Subgame Perfection Analysis of Extensive-Form Games Backward Induction Subgame Perfection Applications Bargaining and Negotiations Forward Induction Applications | Analysis of Extensive-Form Games G, Chapter 2.1A. Subgame Perfection G, Chapter 2.2A. Applications G, Chapters 2.2B, 2.2C, 2.2D, 2.1B, and 2.1C. Bargaining and Negotiations G, Chapter 2.1D. |
| 9 | Review | |
| 10 | In Class Midterm Exam 1 | |
| 11-12 | Repeated Games and Cooperation | G, Chapter 2.3. |
| 13-14 | Incomplete Information Bayesian Nash Equilibrium Auctions Applications | Bayesian Nash Equilibrium G, Chapters 3.1A and 3.1C. Applications G, Chapter 3.2. |
| 15-16 | Dynamic Games of Incomplete Information Perfect Bayesian Equilibrium Sequential Bargaining Under Asymmetric Information | Perfect Bayesian Equilibrium G, Chapter 4.1. Sequential Bargaining Under Asymmetric Information G, Chapter 4.3B. |
| 17 | Review | |
| 18 | In Class Midterm Exam 2 | |
| 19-21 | Problems of Asymmetric Information in Economics Signaling and the Intuitive Criterion Applications of Signaling The Principal-Agent Problem Applications; Lemons, Efficiency Wages, Credit-Rationing, Price-Discrimination | Signaling and the Intuitive Criterion G, Chapters 4.2A and 4.4. Applications of Signaling G, Chapters 4.2B and 4.2C. The Principal-Agent Problem Kreps, Chapter 17. |
| 22-23 | Global Games | |
| 24-25 | Evolutionary Foundations of Equilibrium Evolutionarily Stable Strategies and Replicator Dynamics | |
| 26-27 | Applications and Review Final Exam |
Table of Contents
Study Materials
Readings
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Readings are also avaiable by session. There are no specific readings associated with recitation sections.
Textbook
The main textbook will be:
Gibbons, Robert. Game Theory For Applied Economists. Princeton, NJ: Princeton University Press, 1992. ISBN: 0691003955.
This is the only required textbook and covers the majority of this course's topics. I recommend that you buy it.
The following two books will also be very useful, especially for the exercises. (You need to solve a lot of problems to learn Game Theory.)
Dutta, Prajit. Strategies and Games. Cambridge, MA: MIT Press, 1999. ISBN: 0262041693.
Watson, Joel. Strategy: An Introduction to Game Theory. New York, NY: W.W. Norton, 2002. ISBN: 0393976483.
I will also refer to:
Kreps, David. A Course in Microeconomic Theory. New York, NY: Harvester Wheatsheaf, 1990. ISBN: 0745007627.
All the lectures will be supplemented with detailed notes as well.
Those who want more advanced treatment should look at:
Fudenberg, Drew, and Jean Tirole. Game Theory. Cambridge, MA: MIT Press, 1991. ISBN: 0262061414.
or
Osborne, Martin, and Ariel Rubinstein. A Course in Game Theory. Cambridge, MA: MIT Press, 1994. ISBN: 0262650401.
These two books are very good but harder than the level at which the course is pitched. Those who need an easier – and longer – exposition of the topics can read:
Dixit, Avinash, and Susan Sekeath. Games of Strategy. New York, NY: W.W. Norton, 1999, 2004. ISBN: 0393924998.
There have been several textbooks published recently. I encourage you to look at these books for extra problems to solve.
"G" refers to Gibbons' textbook.