Economics 414: Game Theory [Syllabus]

Professor Peter Cramton

Tuesday and Thursday, 9:30 to 10:45 am, Tydings 0111, Spring 2005

Wouldn’t life be simple if, in making decisions, we could ignore the interests and actions of others? Simple yes–but boring too. The fact remains that most real-world decisions are not made in isolation, but involve interaction with others. This course studies the competitive and cooperative behavior that results when several parties with conflicting interests must work together. We will learn how to use game theory to formally study situations of potential conflict: situations where the eventual outcome depends not just on your decision and chance, but the actions of others as well. Applications are drawn from economics, business, and political science. Typically there will be no clear cut “answers” to these problems (unlike most single-person decisions). Our analysis can only suggest what issues are important and provide guidelines for appropriate behavior in certain situations.


Course Materials (Chapter references are to Martin J. Osborne, An Introduction to Game Theory.)

Web exercises (Web Sets) can be found at http://gametheory.tau.ac.il/student/. Your user name is CR479U<email>, where <email> is your email address (e.g., CR479Ustudent@email.com). The class password is e139288Zt. It is case sensitive.

Slides Web Sets/Problem Sets/Exams
  1. Chap 1. Introduction
  2. Chap 2. Nash equilibrium: Theory
  3. Chap 3. Nash equilibrium: Illustrations
  4. Chap 4. Mixed strategy equilibrium
  5. Chap 5. Extensive games with perfect information: Theory
  6. Chap 6. Extensive games with perfect information: Illustrations
  7. Chap 7. Extensive games with perfect information: Extensions and discussion
  8. Chap 8. Coalition games and the core
  9. Chap 9. Bayesian games
  10. Chap 10. Extensive games with imperfect information
  11. Chap 11. Strictly competitive games and maxminimization
  12. Chap 14. Repeated games: The prisoner’s dilemma
  13. Chap 15. Repeated games: General results

Note: Only underlined problems in a PS are to be handed in. Answers to non-underlined problems in PS are here.

  1. Jan 31: Web Set 1
  2. Feb 2: Web Set 2
  3. Feb 7: Web Set 3
  4. Feb 8: Rock-Paper-Scissors
  5. Feb 15: PS 1. Chap 1: 5.3, 6.1;
    Chap 2: 16.1, 17.1, 27.1, 27.2, 31.2, 47.1, 48.1
  6. Feb 16: Web Set 4
  7. Mar 10: PS 2. Chap 3: 58.1, 59.2, 61.1, 67.1, 67.2, 84.1;
    Chap 4: 101.1, 114.2, 121.2, 141.1
  8. Mar 29: PS 3. Chap 5: 161.1, 163.1, 168.1, 173.2, 176.1;
    Chap 6: 183.1, 191.1, 196.3, 198.1;
    Chap 7: 210.3, 214.1, 224.1, 234.1
  9. Mar 30: Web Set 5
  10. Apr 5: Midterm Answers
  11. May 3: PS 4. Chap 8: 254.1, 256.1, 258.1, 265.1,
    Chap 9: 276.1, 282.1, 282.2, 284.1,
    Chap 10: 316.1, 318.2, 319.3
    Chap 14: 426.1, 428.1, 442.1
  12. May 17: Final Tuesday, 8am