GAME THEORY AND ECONOMIC APPLICATIONS (Econ 521)

TTh 11:00am-12:15pm, BIOCHEMISTRY 1125
Professor: Marzena Rostek
Office hours: Tu, 5:30pm-6:30pm, 7440 SS

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SYLLABUS
All other official materials (problem sets, handouts, practice exams, solutions etc.)
will be posted at Learn@UW.

READINGS: W=Watson, O=Osborne

L1 (Jan 24): What is game theory? “Guess the Number” game. Dominance.
W: Ch 1, Ch 6 (pp. 51-55); O: Ch 1, Ch 2 Sections 2.1-2.2.

L2 (Jan 26): Strictly and weakly dominated strategies. Iterated dominance. Common knowledge.
W: Ch 5, Ch 7; O: Sections 2.9.1-2, 12.2-12.4.

L3 (Jan 31): Best response.
W: Ch 4, Ch 6 (pp. 56-62); O: Section 2.8.

L4 (Feb 2): Synergistic relationship. Externalities. Best response with continuous strategies.
W: Ch 8 (pp. 80-86); O: pp. 39-41; PS1 due.

L5 (Feb 7): Outcomes versus payoffs. Nash Equilibrium.
W: Ch 9 (pp. 92-102); O: Section 2.3, 2.5-2.6.

L6 (Feb 9): Nash Equilibrium-examples and interpretation.
W: Ch 7 (pp. 71-72); O: Section 2.7; PS2 due.

L7 (Feb 14): Oligopolistic competition. Cournot model of quantity competition. Collusion.
W: Ch 10 (pp. 107-109); O: Section 3.1.

L8 (Feb 16): Bertrand model of price competition. Solving for NE without calculus.
W: Ch 10 (pp. 109-114); O: Section 3.2; PS 3 due.

L9 (Feb 21): Electoral competition. Mixed strategies.
W: Ch 8 (pp. 77-80), Ch 11; O: Section 3.3; 4.1-4.2.

L10 (Feb 23): Mixed strategy Nash Equilibrium.
W: pp. 383-385, Ch 11; O: Section 4.3.

L11 (Feb 28): Mixed strategy Nash Equilibrium. Existence of Nash Equilibria.
No new readings. PS 4 due.

L12 (March 1): Introduction to dynamic games. Backward Induction.
W: Ch 2; O: Section 5.1.

L13 (March 6): Review.
Handout 1.

L14 (March 8): Midterm 1.

L15 (March 13): Hold-up problem. Trees and strategies in dynamic games.
W: Ch 14; O: Section 5.2.

L16 (March 15): Centipede game. Stackelberg model.
W: Ch 16 (pp. 180-182); O: Sections 6.2.1-6.2.2, 7.7 (pp. 233-236).

L17 (March 20): Nash Equilibrium versus Backward Induction. Subgame Perfect Nash Equilibrium.
W: Ch 15; O: Sections 5.3-5.5.

L18 (March 22): Ultimatum game. Dictatorship game. Perfect and imperfect information.
W: Ch 19 (pp. 214-216); O: Section 6.1. PS 5 due.

L19 (March 27): Bargaining.
W: Ch 16 (pp. 216-220); O: Sections 16.1.1-16.1.2.

L20 (March 29): War of attrition.
No new readings. PS 6 due.

Spring Break

L21 (April 10): Review.
Handout 2.

L22 (April 12): Midterm 2.

L23 (April 17): Finitely repeated games.
W: Ch 22 (pp. 257-262); O: Sections 14.1, 14.4.

L24 (April 24): Infinitely repeated games.
W: Ch 22 (pp. 263-266), Ch 23; O: Sections 14.2-14.3, 14.5-14.6, 14.9.

L25 (April 26): Repeated games and contracts.
W: Ch 22 (pp. 266-270); O: Sections 14.7-14.8.

L26 (May 3): Auctions.
W: Ch 27 (pp. 323-327); O: Sections 9.6.1-9.6.2. PS 7 due.

L27 (May 8): Information economics. Adverse selection.
W: Ch 27 (pp. 220-322); O: Section 10.7.

L28 (May 10): Job market signaling.
No new readings. PS 8 due.

LINKS:
Practice, practice, practice!
History of Game Theory
Econ glossary
Movie
Autobiographies:
Robert J. Aumann
John C. Harsanyi
Daniel Kahneman
John F. Nash
Thomas C. Schelling
Reinhard Selten
Vernon Smith

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