Economics 703: Advanced Microeconomics [ Syllabus ]
Professor Peter Cramton
Tuesday and Thursday, 9:30 am to 10:45 am, Tydings 0111, Fall 2013
Presents a formal treatment of game theory. We begin with extensiveform games. A game tree is defined, as well as information sets and pure, mixed and behavioral strategies. Existence of Nash equilibria is discussed. We then turn to the analysis of dynamic games, covering repeated games, finitely repeated games, the folk theorem for repeated games, subgame perfection, and punishment strategies. Next, games with incomplete information are studied, including direct revelation games, concepts of efficiency, and information transmission. Several refinements of Nash equilibria are defined, such as sequential equilibria and stable equilibria. The analysis of enduring relationships and reputations is covered. The course concludes with a discussion of two important applications of game theory: auctions and bargaining. The topics include sealedbid auctions, open auctions, private valuation and common valuation models, the winner’s curse, auction design, bargaining with incomplete information, and combinatorial auctions.
Changes to Regular Class Schedule
No class days:
Tuesday, Sep 17
Thursday, Oct 3
Tuesday, Oct 8
Thursday, Oct 10
Thursday, Nov 21
Double class days (class starts at 8:10am):
Tuesday, Sep 10
Thursday, Sep 19
Tuesday, Sep 24
Tuesday, Oct 1
Tuesday, Nov 19
Course Materials
There are a number of simple web exercises that are helpful in motivating the course material and understanding the assumptions of the theory. The web exercises and due dates are shown below; once the due date has passed the results will be made available at the links below for each web exercise:
Web Exercises, available at http://gametheory.tau.ac.il/student/ course number 2269, class password 4556
1. Introductory Games, due Sep 5
2. Classical Matrix Games, due Sep 10
3. Finite Horizon Games, due Sep 12
4. Ultimatum and Dictator Games, due Sep 19
5. Bargaining and Auctions, due Sep 24 [GneezySmorodinsky 2006]
The lecture notes, slides, problem sets, and answers (once available after the due date) are all available below:
Lecture Notes  Slides 
Problem Sets  Problem Set Answers 

Other Materials
Vayanos RESTUD 1999, strategictradingindynamicmarket