Syllabus

I often refer to D. Fudenberg and J. Tirole, Game Theory (MIT Press) [FT] and M. Osborne and A. Rubinstein, A Course in Game Theory (MIT Press) [OR].

1. Review. Nash equilibrium, common knowledge, iterated elimination of strictly and weakly dominated strategies, rationalizability. Lead into extensive game forms.

FT, 1, 2.1, 2.2

OR, 3.1, 3.2, 3.3, 4

2. Extensive Games of Complete Information. Game trees, subgame perfection, paradoxes of rationality

FT 3

Selten R, A Reexamination of The Perfectness Concept for Equilibrium Points in Extensive Games, International Journal of Game Theory, 1975, 25-55.

Kreps D, and Wilson R, Sequential Equilibria, Econometrica, 1982, 863-894.

P. Reny (1992), "Rationality in Extensive-Form Games." Journal of Economic Perspectives 6, 103--18.

3. Applications of Complete Information Extensive Games. repeated games, bargaining, some coalition formation

3.1. Repeated Games

D. Abreu (1988),“On the Theory of Infinitely Repeated Games with Discounting,” Econometrica 56, 383–96.

Abreu, D., Pearce, D. and Stacchetti, E. (1990). "Toward a theory of discounted repeated games with imperfect monitoring," Econometrica, 58, 1041-1063.

D. Fudenberg and E. Maskin (1986), "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica 54, 533-556.

3.2 Bargaining and Binding Agreements

A. Rubinstein (1982), "Perfect Equilibrium in a Bargaining Model," Econometrica 50, 97-110.

FT, 4.6.

K. Chatterjee, B. Dutta, D. Ray and K. Sengupta (1993), "A Noncooperative Theory of Coalitional Bargaining," Review of Economic Studies 60, 463-477.

3.3. Other Dynamic Games Renegotiation, games with state variables, nongeometric discounting (this part likely to be skipped)

4. Games with Incomplete Information. Return to Strategic Form. Harsanyi's Idea. Bayesian Nash Equilibrium, The Extensive Form with Incomplete Information. More Refinements.

OR, 2.6., 11, 12

FT, 6, 8, 10, 11

I-K. Cho and D. Kreps (1987), "Signalling Games and Stable Equilibria," Quarterly Journal of Economics 102, 179-221.

5. Applications of Games with Incomplete Information

5.1. Reputation and Bargaining

D. Kreps, P. Milgron, J. Roberts and R. Wilson (1981), "Rational Cooperation in the Finitely Repeated Prisoners Dilemma," Journal of Economic Theory 27, 245-252.

D. Kreps and R. Wilson (1982),"Reputation and Imperfect Information," Journal of Economic Theory 50, 253-79

F. Gul, H. Sonnenschein and R. Wilson (1986), "Foundations of Dynamic Monopoly and the Coase Conjecture," Journal of Economic Theory 39, 155-190.

D. Abreu and F. Gul (2000), "Bargaining and Reputation," Econometrica 68, 85-117.

5.2. Global Games

H. Carlsson and E. Van Damme (1993), "Global Games and Equilibrium Selection," Econometrica 61, 989-1018.

S. Morris and H. Shin (1998), "Unique Equilibrium in a Model of Self-Fulfilling Currency Attacks," American Economic Review 88, 587-597.

5.3. Signaling

J. Banks and J. Sobel (1987), "Equilibrium Selection in Signaling Games," Econometrica 55, 647–662.

D. Bernheim (1994), "A Theory of Conformity," Journal of Political Economy 102, 841-77

5.4. Cheap Talk

V. Crawford and J. Sobel (1982), "Strategic Information Transmission," Econometrica 50, 1431-1451

M. Battaglini (2002), "Multiple Referrals and Multidimensional Cheap Talk," Econometrica 70, 1379-1401.

6. Miscellaneous Topics. To be covered if we have additional time.

6.1. Large Populations

M. Kandori (1992), "Social Norms and Community Enforcement," Review of Economic Studies 59, 61-80

6.2. Imperfect Observability

K. Bagwell (1995), "Commitment and Observability in Games," Games and Economic Behavior 8, 271-280.

6.3 Aspirations and Learning

M. Kandori, G. Mailath and R. Rob (1993), "Learning, Mutation and Long Run Equilibria in Games," Econometrica 61, 27-56.