Game Theory (EC 452)
Spring 2008
Required Books (I suggest you buy them from the publisher, on Amazon, or any other site you like. They will not be stocked in our bookstore). You will need to read both and we will use both extensively.
Joel Watson, 2007, Strategy: An Introduction to Game Theory. SECOND Edition. From Publisher at 20% discount and free shipping.
James Miller, 2003, Game Theory at Work: How to Use Game Theory to Outthink and Outmaneuver Your Competition, Mc Graw Hill
Suggested Reading
Rasmusen Textbook Chapters on Rasmusen's Site
Readings and Links
Joel Watson's (author of our text) website
History of Game Theory from Paul Walker's site
Practice Problems:
2x2 Practice Normal Form Game Generator (Excel):
You can enter payoffs and this tells you the Pure Nash, Mixed Nash, and if there are any strictly dominant strategies. Great to create lots of games and practice solving for mixed Nash, etc.
Topics
Additional Material
(Plus downloadable problem guides)Practice Problems From WATSON Text (all are possible for exams)
Concepts from WATSON INTRODUCTION Chap 1 - Introduction Miller Chapter 1 and Chap 2 Ex: 1, 2, 3, 4, 5, 6, 7, 8 Game, 3 Major Tensions Chap 2 - Extensive Form Miller Chap 2 - Threats, Promises, and Sequential Games Ex: 1, 2, 3, 4, 5, 6, 7, 8 Information set, Extensive Form Game STATIC ANALYSIS Chap 3 - Strategies and the Normal Form Miller Chap 3 - The Dangers of Price Competition
Miller Chap 4 - Simultaneous GamesEx: 1, 2, 3, 4, 5, 6, 7 Strategy, Normal Form Game Chap 4 - Beliefs, Mixed Strategies, and Expected Payoffs Miller Chap 3 - Chap 4 Ex: 1, 2, 3, 4, 5 Belief, Mixed Strategy, Chap 5 - General Assumptions and Methodology Miller Chap 3 - Chap 4
Miller Chap 5 - Massive Coordination GamesRationality, Common Knowledge Chap 6 - Dominance and Best Response Miller Chap 3 , Chap 4 & Chap 5 Guided Ex. (pp. 62 - 63)
Ex: 1, 2, 3, 4, 5, 6, 7, 8Dominated Strategy, Efficiency, Best Response Chap 7 - Rationalizability and Iterated Dominance Miller Chap 3 , Chap 4 & Chap 5 Guided Ex. (pp. 72 - 73) Ex: 1, 2, 3, 4, 5, 6
Iterated Dominance, Rationalizable Strategies, Strategic Uncertainty, Coordination Problem, Various Solutions to Coord Prob, Focal Points Chap 8 - Location and Partnership Miller Chap 3 , Chap 4 & Chap 5 Ex. 1 & 2 Chap 9 - Nash Equilibrium Miller Chap 3 , Chap 4 & Chap 5 and
Miller Chapter 6 - Nash Equilibrium
Miller Chapter 7 - Prisoner's DilemmaGuided Ex. (pp. 102 - 103) Ex: 1 (a & b), 2, 3, 4, 5, 7, 8, 11,
Nash Equilibrium Chap 10 - Oligopoly, Tariffs, Crime, and Voting Skipped Chap 11 - Mixed Strategy Nash Equilibrium Guided Ex. (pp. 128 - 129)
Ex: 1, 2, 3, 4, 5, 6, 7, 10, 11Mixed-Strategy Nash Equilibrium Chap 12 - Strictly Competitive Games and Security Strategies Two-player, strictly competitive game, Security strategy Chap 13 - Contract, Law, and Enforcement in Static Settings Guided Ex. (pp. 151 - 152) Ex: 1 & 2
Technology of the relationship, Induced Game, Full verifiability, Limited Verifiabiliy, Breach remedy, Expectation damages, Reliance damages, Restitution damages EXAM ONE DYNAMIC ANALYSIS Chap 14 - Details of the Extensive Form Guided Ex + Ex 1 - 5 Chap 15 - Backward Induction and Subgame Perfection Guided Ex + Ex 1 - 8 Chap 16 - Topics in Industrial Organization skip for now INFORMATION Chap 24 - Random Events and Incomplete Information Guided Ex + Ex 1 - 4 Chap 25 - Risk and Incentives in Contracting Miller Chap 13 Guided Ex + Ex 1 - 3 Chap 26 - Bayesian Nash Equilibrium and Rationalizability Chap 27 - Lemons, Auctions, and Information Aggregation Chap 28 - Perfect Bayesian Equilibrium Guided Ex + Ex 1 - 7 Chap 29 - Job Market Signaling and Reputation Ex. 1 - 3 EXAM TWO