(Theory of Repeated Games)
The course has two main parts.
In the first we will develop the tools to study subgame perfect equilibria of repeated games with discounting, beginning with the simple case of perfect monitoring, and concluding with APS.
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
In the second part we will discuss topics.
1. Credible Government Policies
2. Stochastic games
3. Stability of Nash equilibria;
4. KM stability, M stability
5. Stable equilibria in finitely repeated games
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:
1. A Mid-Term Exam at the beginning of the fourth week, and
2. A Final Exam, which may include material from the entire course.
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