Post-Graduate School. Module 4: Microeconomics 2
“Post-Graduate School”
Module 4: Microeconomics-2
March 1-5, 2010
Instructor: Professor Pavlo Prokopovych, KSE
E-mail: prokop@eerc.kiev.ua, pprokopo@gmail.com
Non-cooperative game theory is an abstract framework for analyzing strategic situations that involve multi-person interdependent decision making. Conflict, cooperation, coordination, bargaining, auctions are all topics that can be successfully analyzed within this framework.
This course will teach the fundamentals of game theory. Game theory emerged as a branch of applied mathematics and is still quite mathematical. Although we shall rarely use anything more than algebra, the course will be analytically demanding. Though the hard part of game theory is not the math but the logic and mastering this takes time and effort.
READINGS: The course is based on the following recommended books (lecture notes will be provided)
- Martin Osborne, An Introduction to Game Theory, Oxford University Press, 2004
- Robert Gibbons, Game Theory for Applied Economists, Prinston University Press, 1992
- Martin Osborne and Ariel Rubinstein, A Course in Game Theory, Massachusetts Institute of Technology, 1994
- Roy Gardner, Games for Business and Economics, Wiley, 2003
- Charalambos Aliprantis and Subir Chakrabarti, Games and Decision Making, Oxford University press, 2000
The list of topics we shall cover:
- Lectures 1-4. Normal form (strategic) representation of games
Iterated Elimination of Strictly Dominated Strategies. Nash equilibrium. The Cournot and Bertrand Models of Doupoly. Nash Equilibria of Second-Price Sealed-Bid Auctions. Mixed strategies. Existence of Nash equilibrium. Illustrations.
- Lecture 5-8. Games with sequential structure. Strategies and Outcomes. Nash equilibria of Dynamic Games with Perfect Information. Credibility and subgame perfect equilibrium. Stackelberg model of duopoly. Subgame Perfect Equilibria of Games with Imperfect Information. Illustrations.
- Lectures 9-10. Static Games with Incomplete Information. Definition of Bayesian Nash Equilibrium. A Cournot Model of Duopoly with Unknown Costs. First-Price Sealed-Bid Auctions with Incomplete Information. Illustrations. Review.
Schedule:
March 1 (Monday)
Lecture 1. 11:15
Lecture 2. 12:45
Room 86
March 2 (Tuesday)
Lecture 1. 15:55
Lecture 2. 17:25
Room 404
March 3 (Wednesday)
Lecture 1. 18:55
Lecture 2. 20:15
Room 404
March 4 (Thursday)
Lecture 1. 17:25
Lecture 2. 18:55
Room 404
March 5 (Friday)
Lecture 1. 14:25
Lecture 2. 15:55
Room 404
