uclogo  Economics 20700, Introduction to Game Theory

Spring 2006: MW 3:00-4:20 Stuart 105. (discussion M 5:00-5:50 Stuart 105)
Instructor: Roger Myerson (myerson @ uchicago.edu). Teaching assistant: Francesco Decarolis (fdc @ uchicago.edu).
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 [20%], a midterm exam [30%], and a final exam [50%].  Homework is graded on basis of effort only, and may done in groups of 2 or 3. The midterm is scheduled for April 26. The final exam is scheduled for June 5 at 4:00-6:00pm. (Senior final: May 31, 3-5pm, SS 105.)

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): pp 21-57, pp 58-80.
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) "Justice, Institutions, and Multiple Equilibria".
(4) Other notes.

Course outline:

  1. Strategic games (without randomization): dominated strategies and Nash equilibria. Osborne chs 1,2. (Assignment 1 due Apr 3.)
  2. Nash equilibria in randomized strategies. Osborne ch 4. (Assignment 2 due Apr 12)
  3. Extensive games with perfect information. Osborne ch 5. (Assignment 3 due Apr 19)
  4. More on equilibria. Osborne ch 3 and ch 6, and notes pp1-2 on computing equilibria. (Assignment 4 due May 8)
  5. Simultaneous moves and chance. Osborne sections 7.1, 7.6, and notes p10 on the attrition game.
  6. Bayesian games where players have different information. Osborne ch 9, and notes pp3-5 on increasing strategies. (Assignment 5 due May 17)
  7. Bargaining and signaling. Reading on mediation pp 67-79, notes pp6-9, Osborne sections 7.7, 10.1-10.5. (Assignment 6 due at final exam [answer])
  8. [Repeated games. Osborne, ch 14,15.]

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