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Game Theory

Description:

Game Theory analyses the decision-making behavior of rational agents in situations in which several actors are involved. Unlike Decision Theory, Game Theory describes a situation in which the success of the individuals not only depends on their own behavior, but on the actions of the other participants as well. The course will deepen and extend the basic knowledge of Game Theory acquired in the Bachelor studies. It shows the applications of basic theoretical concepts (Nash equilibrium, subgame perfect equilibrium) to more complicated economic applications. It introduces further concepts for the analysis of sequential-move games that allows us to eliminate implausible predictions of the game obtained by the basic equilibrium concepts. Such refinements include the weak-perfect Bayesian equilibrium, sequential equilibrium, perfect equilibrium. Finally, the course discusses the analysis of the games with incomplete information both in simultaneous and sequential move games. We discuss different equilibrium concepts and their various refinements in the context of these games.

Prerequisites:
Bachelor’s degree in economics or a comparable discipline. Basic knowledge of game theory and good mathematical and analytical skills are an advantage.

Organization:

The course is comprised of one lecture a week (2 SWS) and an exercise class (2 SWS). The lecture takes place every Tuesday from 11.30 – 13.00 in room LG 0.144, starting on the 23.10.2018. The exercise class is on Tuesdays from 13:15 – 14:45 in LG 0.141, starting on the 30.10.2018.

 

Grading:

There will be a final exam (90 minutes long) at the end of the semester. The exam covers all materials from the lectures and exercise classes. In addition, students will be asked to complete homework assignments. The course can be passed only if the final exam is passed. The final grade is computed based on the grade of the final exam (80%) and the points obtained on the homeworks (20%).

Credit points

Master students who pass the exam and homework assignments receive 5 ECTS points.

Literature:

Fudenberg, D. and Tirole, J. (2007), Game Theory, Cambridge, MIT Press.

Further Readings:
Krishna, V. (2002), Auction Theory, Academic Press.
Osborne, M. and A. Rubenstein (1994), A Course in Game Theory, Cambridge, MIT Press.

Contact person:

Edmund Baker

Schedule in WS 2018/19:

Lectures Tuesday, 11:30 am – 13:00 pm, LG 0.144 (starting 23.10.2018)
Exercises Tuesday, 13:15 pm – 14:45 pm, LG 0.141 (starting 30.10.2018)

Not offered in the summer term!