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Economic Applications of Game Theory >> Content Detail



Study Materials



Readings

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Readings are also avaiable by session. There are no specific readings associated with recitation sections.



Textbook


The main textbook will be:

Amazon logo Gibbons, Robert. Game Theory For Applied Economists. Princeton, NJ: Princeton University Press, 1992. ISBN: 0691003955.

This is the only required textbook and covers the majority of this course's topics. I recommend that you buy it.

The following two books will also be very useful, especially for the exercises. (You need to solve a lot of problems to learn Game Theory.)

Amazon logo Dutta, Prajit. Strategies and Games. Cambridge, MA: MIT Press, 1999. ISBN: 0262041693.

Amazon logo Watson, Joel. Strategy: An Introduction to Game Theory. New York, NY: W.W. Norton, 2002. ISBN: 0393976483.

I will also refer to:

Amazon logo Kreps, David. A Course in Microeconomic Theory. New York, NY: Harvester Wheatsheaf, 1990. ISBN: 0745007627.

All the lectures will be supplemented with detailed notes as well.

Those who want more advanced treatment should look at:

Amazon logo Fudenberg, Drew, and Jean Tirole. Game Theory. Cambridge, MA: MIT Press, 1991. ISBN: 0262061414.

or

Amazon logo Osborne, Martin, and Ariel Rubinstein. A Course in Game Theory. Cambridge, MA: MIT Press, 1994. ISBN: 0262650401.

These two books are very good but harder than the level at which the course is pitched. Those who need an easier – and longer – exposition of the topics can read:

Amazon logo Dixit, Avinash, and Susan Sekeath. Games of Strategy. New York, NY: W.W. Norton, 1999, 2004. ISBN: 0393924998.

There have been several textbooks published recently. I encourage you to look at these books for extra problems to solve.



Readings by Session


"G" refers to Gibbons' textbook.


Lec #TopicsREADINGS
1Introduction to Game Theory
2Payoffs in Games: Rational Choice Under Uncertainty

Expected Utility Theory; Risk Aversion
Kreps, Chapters 3.1-3.3.
3-5A More Formal Introduction to Games

Extensive Forms and Normal Forms

Strategies, Dominant Strategies and Iterative Elimination of Strictly Dominated Strategies

Nash Equilibrium

Applications of Nash Equilibrium
Extensive Forms and Normal Forms

G, Chapters 1.1A and 2.1A.

Strategies, Dominant Strategies and Iterative Elimination of Strictly
Dominated Strategies

G, Chapter 1.1B.

Nash Equilibrium

G, Chapter 1.1C.

Applications of Nash Equilibrium

G, Chapter 1.2.
6-8Backward Induction and Subgame Perfection

Analysis of Extensive-Form Games

Backward Induction

Subgame Perfection

Applications

Bargaining and Negotiations

Forward Induction

Applications
Analysis of Extensive-Form Games

G, Chapter 2.1A.

Subgame Perfection

G, Chapter 2.2A.

Applications

G, Chapters 2.2B, 2.2C, 2.2D, 2.1B, and 2.1C.

Bargaining and Negotiations

G, Chapter 2.1D.
9Review
10In Class Midterm Exam 1
11-12Repeated Games and CooperationG, Chapter 2.3.
13-14Incomplete Information

Bayesian Nash Equilibrium

Auctions

Applications
Bayesian Nash Equilibrium

G, Chapters 3.1A and 3.1C.

Applications

G, Chapter 3.2.
15-16Dynamic Games of Incomplete Information

Perfect Bayesian Equilibrium

Sequential Bargaining Under Asymmetric Information
Perfect Bayesian Equilibrium

G, Chapter 4.1.

Sequential Bargaining Under Asymmetric Information

G, Chapter 4.3B.
17Review
18In Class Midterm Exam 2
19-21Problems of Asymmetric Information in Economics

Signaling and the Intuitive Criterion

Applications of Signaling

The Principal-Agent Problem

Applications; Lemons, Efficiency Wages, Credit-Rationing, Price-Discrimination
Signaling and the Intuitive Criterion

G, Chapters 4.2A and 4.4.

Applications of Signaling

G, Chapters 4.2B and 4.2C.

The Principal-Agent Problem

Kreps, Chapter 17.
22-23Global Games
24-25Evolutionary Foundations of Equilibrium

Evolutionarily Stable Strategies and Replicator Dynamics
26-27Applications and Review

Final Exam

 








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