The Lectures

My lectures will be based on a variety of sources, principally my own notes. However, I recommend that you consult the following book by Martin Osborne: An Introduction to Game Theory, Oxford University Press, 2004. Another good book, especially for the applications, is Robert Gibbons (1992), A Primer in Game Theory, FT Prentice Hall, Harlow, England. [The U.S. version is Game Theory for Applied Economists, Princeton University Press.]

My lectures are the primary source material for this course. It is important that you attend them all and take notes.

While I have divided the course topics that follow into ten lectures, it is unlikely that I will be able to maintain these compartments exactly. In particular, it is possible that I will never arrive at the last topic of the course which is Cooperative Game Theory and begins here on Lecture 9.

Monday, January 10. Lecture I.

Game Theory, An Overview of the Basics: Games in normal form, strategies, payoffs, Nash equilibrium, equilibrium as an equilibrium of beliefs. Games in extensive form, subgame perfection, backward induction.

Friday, January 14. Lecture II.

Repeated Games. Finitely and infinitely repeated games. The one-shot deviation principle. How to construct perfect equilibria: reversion to Nash, more complicated continuations.

Monday, January 17. Lecture III.

Repeated Games. Construction of perfect equilibria contd. Folk theorems.

Friday, January 21. Lecture IV.

Repeated Games. Applications: Cournot and Bertrand oligopoly, informal insurance...

Monday, January 24. Lecture V.

Games with Incomplete Information: Static Bayesian Games. Types. Bayesian Nash equilibrium.

Friday, January 28. Lecture VI.

Games with Incomplete Information: Applications to auctions, financial crises, juries...

Monday, January 31. Lecture VII.

Games with Incomplete Information: Extensive form games with incomplete information. Sequential equilibrium. Forward induction. Begin applications (see next lecture)

Friday, February 04. Lecture VIII.

Games with Incomplete Information: Continue applications: Spence signaling model, cheap talk ...

Monday, February 07. Lecture IX.

Cooperative Games: Binding agreements. Characteristic functions. Solution concepts: core, stable set, Shapley value.

Friday, February 11. Lecture X.

Cooperative Games: Bargaining.