Applied Game Theory

Abstract

• This course is an introduction to game theory and its algorithmic aspects. Ideas such as dominance, backward induction, Nash equilibrium, evolutionary stability, commitment, credibility, asymmetric information, adverse selection, and signaling are discussed and applied to games played in class and to examples drawn from economics, politics and computer science in general.

Bibliography

• A. Dixit and B. Nalebuff. Thinking Strategically, Norton 1991
• J. Watson. Strategy: An Introduction to Game Theory, Norton 2002
• P.K. Dutta. Strategies and Games: Theory And Practice, MIT 1999
• Fundeberg, Tirole, Game Theory, MIT press Roughgarden et al, Algorithmic Game Theory, Cambridge Press
• YALE OPEN COURSES: http://oyc.yale.edu/economics/game-theory

Description

1. Introduction: five first lessons
2. Putting yourselves into other people's shoes
3. Iterative deletion and the median-voter theorem
4. Best responses in soccer and business partnerships
5. Nash equilibrium: bad fashion and bank runs
6. Nash equilibrium: dating and Cournot
7. Nash equilibrium: shopping, standing and voting on a line
8. Nash equilibrium: location, segregation and randomization
9. Mixed strategies in theory and tennis
10. Mixed strategies in baseball, dating and paying your taxes
11. Evolutionary stability: cooperation, mutation, and equilibrium
12. Evolutionary stability: social convention, aggression, and cycles
13. Sequential games: moral hazard, incentives, and hungry lions
14. Backward induction: commitment, spies, and first-mover advantages
15. Backward induction: chess, strategies, and credible threats
16. Backward induction: reputation and duels
17. Backward induction: ultimatums and bargaining
18. Imperfect information: information sets and sub-game perfection
19. Subgame perfect equilibrium: matchmaking and strategic investments
20. Subgame perfect equilibrium: wars of attrition
21. Repeated games: cooperation vs. the end game
22. Repeated games: cheating, punishment, and outsourcing
23. Asymmetric information: silence, signaling and suffering education
24. Asymmetric information: auctions and the winner's curse