1. Introduction: What is a game? Simple examples, basic assumptions.

2. Games in Extensive Form: Perfect and imperfect Information, the tree, strategies (pure, mixed,and behavioral strategies), perfect recall (Kuhn’s theorem), Bayesian games (incompleteinformation).

3. Games in Normal Form: Normal form games, Thompson transformation, the space of games.

4. Solving Games: Dominance (weak and strict dominance), rationalizable strategies, Nashequilibrium, zero-sum games, correlated equilibrium.

5. Applications: Oligopoly (Cournot, Bertrand, differentiated commodities), repeated games,mechanism design, principal-agent problems, signaling, adverse selection and moral hazard,auctions.

Syllabus

Lecture and homework assignments to be discussed in class.

This course will most likely take place at IHS.

In each lecture problem sets are distributed. Problems will be discussed in class and the student’s performance in handling the problems will be graded. In addition, there will be two written classroom exams, a midterm and a final. Each written exam covers the material that has been discussed up to the exam date. Written exams consist of 3-4 problems that students have to solve in writing.

Problem sets: 20%

Midterm exam: 35%

Final exam: 45%