Professor ALDO RUSTICHINI
(Theory of Repeated Games)
Term: Spring 2013
In the course we will develop the tools to study subgame perfect equilibria of repeated games with discounting. This is the theory of strategic interaction between players that meet repeatedly over time, and either do so infinitely many times, or they do not know for sure when their interaction will stop. We will focus on the case of perfect monitoring in which strategies are observed in every period. In the first part we will study the theory, in the second we will consider two important applications.
First part: theory
1. Reminder on Extensive Form games: Behavioral and Mixed Strategies
2. Definition of Repeated Game with discounting
3. Nash and Sub-game Perfect Equilibria of repeated games
4. Feasible and Incentive compatible set of payoffs
5. Nash equilibria of repeated games: characterization
6. Nash operator: main properties
7. One stage deviation property
8. Subgame Perfect equilibria: characterization
9. Subgame Perfect operator: main properties
10. Simple strategy profiles
11. Folk Theorem
12. Repeated games with imperfect public monitoring
Second part: extension and applications.
1. Credible Government Policies
Home works, Exams and Grades
Home-works are going to be assigned on a regular basis, and the solution discussed in class or in the recitation hour.
There is going to be:
Grades are based on weights of 30 per cent to Homeworks, 30 per cent to Midterm and 40 per cent on the Final.
The midterm exam is on April 18th, Thursday
The last day of class in the fourth mini is May 10. The final exam is on May 9th