uclogo  Economics 20700, Introduction to Game Theory

Spring 2010.
Instructor: Roger Myerson
Prerequisite: Econ 20100. (Students should know how to differentiate a polynomial, but further mathematics preparation is not required for this course.)

Course description. This course introduces students to the basic ideas and applications of game theory. Topics include models of games in extensive and strategic form, equilibria with randomization, signaling and beliefs, reputation in repeated games, bargaining games, investment hold-up problems, mediation and incentive constraints.

Course requirements.  The course grade will be based on homework problem sets, a midterm exam, and a final exam.  Homework is graded on basis of effort only, and may done in groups of 2 or 3.

Required text: Martin Osborne, An Introduction to Game Theory, Oxford U. Press (2004).

Other references:
Robert Gibbons, Game Theory for Applied Economists, Princeton U. Press (1992).
David Kreps, Game Theory and Economic Modelling, Oxford (1990).
Thomas Schelling, Strategy of Conflict, Oxford U. Press (1960) [ch 3 is Journal of Conflict Resolution 1:19-36 (1957)].
Roger Myerson: (1) "Analysis of Incentives in Bargaining and Mediation" in H. P. Young, Negotiations Analysis, U Michigan (1991).
(2) "Utility Theory" chapter in Probability Models for Economic Decisions.
(3) "Learning from Schelling".
(4) "Perspectives on Mechanism Design in Economic Theory".
(5) Other notes.

Homework assignments.

Course outline:

  1. Strategic games (without randomization): dominated strategies and Nash equilibria. Osborne chs 1,2.
  2. Nash equilibria in randomized strategies. Osborne ch 4.
  3. Extensive games with perfect information. Osborne ch 5.
  4. More on equilibria. Osborne ch 3 and ch 6, and notes pp1-2 on computing equilibria.
  5. Simultaneous moves and chance. Osborne sections 7.1, 7.6, and notes p10 on the attrition game.
  6. Repeated games. Osborne, ch 14,15, and notes pp11-13,15.
  7. Bayesian games where players have different information. Osborne ch 9, and notes pp3-5 on increasing strategies.
  8. Extensive games with imperfect information, beliefs and sequential rationality. Osborne ch 10.1-10.5, 7.7, notes p17.
  9. Bargaining and signaling. Notes pp7-8, reading on mediation pp 67-79, mechanism design.

URL of this course page: http://home.uchicago.edu/~rmyerson/econ207.htm