040827 UK Game Theory and Information Economics (MA) (2015S)

This course looks at the implications of rational decision making in an interactive context where a few players interact. This is the area of strategic reasoning, which is the domain of game theory. This is an advanced game theory course and students are supposed to be familiar with the basic set-up of decisions under uncertainty and of game theory. In some lectures, the students are brought to the research frontier in applied game theory as some notions will be discussed in the context of a research paper.

Course outline

Week
10 Introduction to game theory
11 Static Games: dominant strategy, dominated strategy, rationalizability, IEDS, application to Cournot oligopoly FT 1.1, 2.1, BJ article
12 Nash equilibrium (pure and mixed strategy), Correlated Equilibrium FT1.2, 1.3, 2.2
13 Extensive Form Games, subgame perfection,
backward induction paradox; Bargaining FT 3.1 – 3.6
16 Forward induction + application to auctions
with aftermarkets; FT 11.3 + J article
17 Multi-Stage Games I: trigger strategies FT 4.1 – 4.4
18 Repeated Games II: Folk Theorems FT 5.1 – 5.4
19 Q&A session; Midterm Exam
20 Bayesian Games FT 6
21 Applications of Bayesian Games: auctions
22 Dynamic Bayesian Games FT 8.1 – 8.3
23 Dynamic Bayesian Games, refinements: Intuitive Criterion, D1 criterion FT 11.2
24 Applications of Dynamic Bayesian Games JR article
25 Adverse selection and Moral Hazard
26 Q&A session; Final Exam