[Table of Contents]

Course Description

• This is an introductory course in game theory, which will provide you with mathematical frameworks for analyzing strategic situations---your optimal decision depends on what other people will do. 

• Game theory has been widely recognized as a common and important analytical language in such fields as economics, management, political science, psychology, computer science, and biology. 

• To illustrate its analytical value, we will cover a variety of applications, including international relations, development, business competition, marriage problems, and so forth. 

Course Goals

• Students will learn and apply mathematical frameworks of game theory.

• The topics covered include (a) static games, (b) dynamic games, (c) games with incomplete information, and (d) market design.

• The goal is to be able to model interactions of agents based on the above mathematical frameworks.

Course Outline 

• (a) Static Games (4-5 Lectures)

  • Dominant Strategy, Nash Equilibrium, Mixed Strategy 

• (b) Dynamic Games (4-5 Lectures) 

  • Backward Induction, Subgame Perfect Equilibrium, Repeated Games 

• (c) Games with Incomplete Information (3-4 Lectures)

  • Auction Theory, Signaling Model 

• (d) Market Design (2-3 Lectures) 

  • Matching Mechanisms, School Choice

Grading Policy

• The final grade will be based on the assignments (40 points in total) and the final exam (60 points).

  • TBA 

Special Note

• ANYONE in GRIPS (including faculty members) can audit this course.

• There is NO prerequisite for this course, although familiarity with probabilistic thinking would be helpful.

• Working on the assigned problem sets is also an essential part of the course. 

• Instructor will use this website to provide further information and materials for the course.

Textbooks 

• Required: 

  • There is NO required textbook for this course.

• Others: 

  • While lecture slides are the main material for the class, the books listed below might be useful if you need supplementary readings.

  • The following introductory textbooks are full of intuitive explanations: 

    • Dixit, A., Skeath, S., and Reiley, D., Games of Strategy, 5th ed., 2020. 

    • Watson, J., Strategy, 3rd, 2013. 

  • The following books are recommended to understand game theory more lucidly. 

  • The first one is the most concise, the second is the most accessible, and the third one is the most comprehensive among the three. 

    • Gibbons, R., Game Theory for Applied Economists, 1992. 

    • Tadelis, S., Game Theory: An Introduction, 2012.  

    • Maschler, M., Solan, E., and Zamir, S., Game Theory, 2nd, 2020. 

    • Haeringer, G., Market Design: Auctions and Matching, 2018.

      • An intermediate-level textbook that provides a balanced coverage of the two pillars of market design: auctions and matching.

  • Below are some reliable advanced-level textbooks.

    • Osborne, M and Rubinstein, A., Models in Microeconomic Theory, 2nd ed., 2023.

      • You can download the book (pdf) for free here.

    • Fudenberg, D. and Tirole, J., Game Theory, 1991. 

      • This is the definitive, advanced resource for anyone looking to pursue game theory seriously.

Course Schedule

Part (a): Static Games (4 Lectures)

• Lec 1. Introduction to Game Theory [slide]  Feb 6 

• Lec 2. Dominance and Nash Equilibrium [slide]  Feb 6 

  • Lec 2.5.  Why and How is Nash Equilibrium Reached? [slide] 

• Lec 3. Applications of Static Games [slide]  Feb 13 

• Lec 4. Mixed Strategies [slide]  Feb 13  

• Review on Lec 1 - Lec 4 Feb 20 

Part (b): Dynamic Games (5 Lectures)

• Lec 5. Games with Sequential Move  Feb 20 

• Lec 6. Subgame Perfect Equilibrium (SPE)  Feb 27  

• Lec 7. Applications to Business Competition  Feb 27 

  • Lec 7.5 Bargaining 

• Lec 8. Repeated Games  Mar 6 

• Review on Lec 5 - 8  Mar 6

Part (c): Incomplete Information (3 Lectures)

• Lec 9. Bayesian Games  Mar 13 

• Lec 10. Auction Theory  Mar 13 

  • Lec 10.5. Signalling Model  

Part (d): Design Problems (2 + α Lectures)

• Lec 11. Collective Decision Making  Mar 20

• Lec 12. Matching: Theory and Applications  Mar 20 

  • Lec 12.5. Frontier of Market Design  

• Final Exam （120 mins）  Mar 27? 

  • This is a 120-minute closed-book exam.