Descriptif

This course provides an introduction to non-cooperative game theory, which is a fundamental tool to analyze a variety of strategic interactions, such as individuals within organizations, firms competing in markets, political parties in competition and nations engaged in international negotiations. Our course contains rigorous mathematical descriptions of fundamental tools in game theory, as well as a variety of concrete applications to economic context of strategic interactions, such as imperfect competition, information transmission and mechanism design. Students will learn to master game-theoretical concepts, tools and results used in modern microeconomics.  

Outline

1. Normal form games, pure and mixed strategies, Imperfect competition (Cournot, Bertrand, Hotelling) 
2. Solution concepts in NF games (dominance, rationalizability, Nash, perfect, proper)
3. Extensive form games with perfect information, Kuhn’s thm, SPE, backward induction
4. Extensive form games with imperfect information (Bayes rule, sequential rationality, SE, normal form representations)
5. Solutions in NF and EF
6. Applications, introduction to mechanism design
7. Bayesian games
8. Repeated Games
9. Principal agent models under adverse selection and moral hazard
10. Markets under asymmetric information: signaling, screening

Final Exam:

               3 hours, closed-book exam

Textbooks

-          Osborne, Rubinstein (1994) “A Course in Game Theory” MIT Press. Chapters 1-3, 6, 8, 11, 12

-          Mas-Colell, Whinston, Green (1995) “Microeconomic Theory” Oxford University Press.  Chapters 7, 8, 9, 13, 14

Other References

-          Myerson (1991) “Game Theory” Harvard University Press.

-          Schelling (1960) “Strategy of Conflict” Oxford U. Press

-          Kreps (1990) “Game Theory and Economic Modelling” Oxford U. Press