Page last modified 2014-1-30
Applied Game Theory (Economics 316)
Instructor: Ettore Damiano.
- Graham's office hours for Monday March 10 are cancelled
- Week 1 (1/9)
- Main concepts: Game trees, Anticipation principle, Backward Induction.
- Readings: Economist's article ``Game theory in practice''; Chapter 1; Chapter 2 (Sections 2.1 and 2.2); and Chapter 8 (Sections 8.1 and 8.2 disregard reference to Nash Equilibrium).
- Problems: Assignment 1.
- Week 2 (1/16)
- Main concepts: strategies vs. outcomes, investment game, underinvestment, incentive design, war of attrition.
- Readings: Chapter 8 (sections 8.1-8.5);
- Problems: Assignment 2.
- Week 3 (1/23)
- Main concept: strategic form games, strictly dominated strategies, weakly dominated strategies, deletion of dominated strategies.
- Readings: Chapter 2 (section 2.5); Chapter 3 (sections 3.1-3.3) Plus, you might find the following video entertaining:
Golden Balls - split or steal video.
- Problems: Assignment 3.
- Week 4 (1/30)
- Main Concepts: rationality and strictly dominated strategies, iterated deletion of strictly dominated strategies vs. iterated deletion of weakly dominated strategies; applications: IDSDS in a political competition game; IDWDS in a price competition game.
- Readings: Chapter 3 (sections 3.4-3.6).
- Problems: Exercises 4, 5, 7, 8, 10 and 11 in Chapter 3;.
- Week 5 (2/6)
- Main Concepts: best responses, Nash equilibrium, Nash equilibrium
vs. IDSDS, IDWDS and Backward Induction.
- Readings: Chapter 4 (sections 4.1-4.5).
- Problems: Exercises 5, 7, 8, 9 and 11 in Chapter 4. Exercise 2 in Chapter
- Week 6 (2/13)
- term test
- Week 7 (10/29)
- Applications: Bertrand competition, investment coordination, location choice and segregation, Hotelling political competition.
- Readings: Chapter 5 (we did not cover any of the applications in this chapter, but you might still find it a useful read); Chapter 6 (sections 6.1-6.2); notes 1
- Problems: model and solve by backward induction a sequential choice version of the investment coordination and the location choice games considered in class (use an example with a few players); for the investment coordination game show that there are no other Nash equilibria beyond those identified in class; Exercise 3 and 7 in Chapter 5; exercise 3 in Chapter 6.
Past midterm and final exams