Course 2012-2013 a.y.

Go to class group/s: 31

CLMG (6 credits - II sem. - OP  |  SECS-P/01) - M (6 credits - II sem. - OP  |  SECS-P/01) - IM (6 credits - II sem. - OP  |  SECS-P/01) - MM (6 credits - II sem. - OP  |  SECS-P/01) - AFC (6 credits - II sem. - OP  |  SECS-P/01) - CLAPI (6 credits - II sem. - OP  |  SECS-P/01) - CLEFIN-FINANCE (6 credits - II sem. - OP  |  SECS-P/01) - CLELI (6 credits - II sem. - OP  |  SECS-P/01) - ACME (6 credits - II sem. - OP  |  SECS-P/01) - DES-ESS (6 credits - II sem. - OP  |  SECS-P/01) - EMIT (6 credits - II sem. - OP  |  SECS-P/01)

Course Director:
PIERPAOLO BATTIGALLI

Course Objectives

This course provides an introduction to Game Theory, the formal analysis of strategic interaction. Game Theory now pervades most non-elementary models in microeconomic theory and many models in the other branches of economics. The course introduces the necessary analytical tools to be able to understand these models, and illustrates them with some economic applications. The course also aims at developing an abstract analysis of strategic thinking, a critical and open minded attitude toward the standard as well as new game theoretic concepts, and to correct some widespread misunderstandings of game theory.

Course Content Summary

• Introduction to interactive decision theory, terminology, notation.
• Rationality and dominance, rationalizability.
• Nash equilibrium, interpretation, existence.
• Mixed strategy equilibrium, interpretation, existence.
• Correlated and conjectural equilibrium.
• Games with asymmetric or incomplete information.
• Dynamic games, strategic forms, weak dominance, backward and forward
  induction.
• Subgame perfect equilibrium, one-shot-deviation principle.
• Repeated games and multiplicity of equilibria.
• Bargaining games and uniqueness of equilibrium.
• Dynamic games with asymmetric or incomplete information, equivalence
  principles.
• System of beliefs and perfect Bayesian equilibrium.
• Signaling games, pooling and separating equilibria, intuitive criterion.

Detailed Description of Assessment Methods

Written Exam 

Textbooks

• M.J. OSBORNE, A. RUBINSTEIN, A Course in Game Theory, Cambridge MA, MIT Press, 1994.
• Additional lectures notes are distributed during the course.

Exam textbooks & Online Articles (check availability at the Library)

Prerequisites

Introduction to: 

• elementary set theory: sets, Cartesian products, functions;
• elementary analysis: open, closed and bounded sets, limits, continuity, derivatives and maximization;
• linear algebra: vectors and operations on vectors, graphical representation on the Cartesian plane;
• probability theory: probabilities on finite state spaces, conditional probabilities, Bayes rule;
• decision theory: expected utility.

Last change 19/04/2012 15:59