An Introduction to Game Theory
This course is no longer being offered.
When we decide how to behave, we take into account how other players behave, not only because we care about other people but because it affects what we get out of the interaction. Game theory is the systematic study of this strategic interaction. Strategic interactions are present everywhere not only in economics but in politics, sociology, law, movies, computer science, at the end of day we don’t make decisions in a vacuum, we live in society.
This course introduces the basic concepts and analytical tools of elementary game theory in a way that allows the student to apply them in real life situations. At the end of the course the student should be able to formalize a strategic situation as a well-defined game; choose appropriately from a basic kit of analytic tools, called solution concepts, to analyze and solve a wide variety of games and applications; and understand the assumptions underlying these concepts, as well as their strengths and limitations.
This course will explain the fundamentals of game theory starting with basic terms such as strategies, payoffs, information and then progress from the analysis of simple to that of more complex games. These will include single-move games as well as games with multiple rounds, games played under complete knowledge and games where information is imperfect, games with just two players plus games with multiple players. Some advanced topics will be discuss from an applied point of view such as bargaining, voting games and auctions.
By the end of this course students should be able to think strategically and recognize a strategic interaction in real life situations. They should be able to formalize the situation, frame it in terms of the analytical tools discussed and understand the strategies followed by the protagonists of such interaction.
Basic math knowledge is recommended.