## Economics 30200b. Price Theory IIb.

### Course description

This is the second half of Econ 30200 (after the first five weeks on general equilibrium theory, taught by Philip Reny). This part of the course introduces the fundamental ideas of game theory: strategic-form games, Nash equilibrium, extensive-form games, sequential equilibrium, repeated games, and Bayesian games with incomplete information.

*Winter 2018. Instructor:* Roger Myerson. *TAs*: John Van Den Berge, Wenji Xu, Kai Hao Yang.

Groups of up to five students who have met to do a homework assignment together can hand in the assignment as a group.

### Main Texts:

- A. Mas-Colell, M. Whinston, J. Green,
*Microeconomic Theory*, Oxford U Press (1995), chapters 6, 7, 8. - G. Jehle, P. Reny,
*Advanced Microeconomic Theory*3rd ed., Addison-Wesley (2011), chapters 2, 7. - R. Myerson,
*Game Theory*, Harvard U Press (1991), chapters 1-4, 7. (4.5) **Game theory notes**.- R. Myerson, "Nash equilibrium and the history of economic theory," J Economic Literature 37(3):1067-1082 (1999).
- -, "Learning from Schelling's Strategy of Conflict," J Economic Literature 47(4):1109-1125 (2009).
- -, "Harsanyi's games with incomplete information," Management Science 50(12):1818-1824 (2004).

### Homework assignments

### Plan of Topics:

- Utility theory, domination, duality: MWG sectn 6B; JR pp 97-118; My sectns 1.1-1.5, 1.8-1.9; gt notes pp 1-5.
- Strategic-form games, domination, Nash equilibrium: MWG 7D,8B-8D; JR pp 305-319; My 3.1-3.5; gt notes pp 6-8.
- Extensive games, sequential equilibrium, repeated games: MWG 7C,9A-C,12AA; JR pp 325-364; My 2.1-2.2, 4.1-4.7 (link to 4.5), 7.1, 7.4; gt notes pp 17-22.
- Bayesian games with incomplete information: MWG 8E; JR pp 319-325; My 2.8-2.9, 3.9-3.11; gt notes pp 9-16.