1. Introductory concepts. Examples.
2. Individual decision theory. Uncertainty and expected utility. Decision trees. Nature nodes. Incorporating new information.
3. Multiagent decision problems. Games in extensive form. Games with perfect information, backward induction solution, and Zermello's Theorem. Complexity and bounded rationality.
4. The concept of strategy. Strategic form games. Correspondence between the strategic and extensive forms. Solution concepts: domination and Nash equilibrium.
5. Pure and mixed strategies. Existence of Nash equilibrium. Two-player zero sum games: maxmin and minmax.
6. Dynamic games with complete information. Subgame perfect equilibria. Applications to oligopoly theory: von Stackelberg's model, limit pricing, and entry games.
7. The repeated prisoner's dilemma. The dilemma between cooperation and competition. Long term sustainability of cooperative strategies. Study of particular strategies: tit-for-tat and grim trigger. Application: OPEC and the cartel problem.
8. Games with incomplete information. Type representation and Bayesian games. Auctions.
9. Bargaining. The Nash solution. Noncooperative approaches.
10. Coalitions and cooperative games. Characteristic functions with transferable utility. The core. The Shapley value.
There will be a weekly problem set (possibly with some exception), related to the material taught in class during the week. The following week students will solve a (multiple-choice) quiz based on that problem set. The course grade will be the average of the results of those quizzes (ignoring the one with the worst grade). Students wanting to improve their grade, or those who did not obtain a passing average, may take a final exam at no risk (ie, the course grade is the max between the course average and the exam).
Depending on the pace of the course and the interests of the students, we might skip some of the items listed in the syllabus, and/or cover more deeply some of the items, and/or cover some other topic not included in the syllabus.
If the students are interested, we might also run some experiments.
Most of what we will see in the course may be found (maybe not treated in exactly the same manner) in the book by Martin Osborne. Students should keep in mind that the level of that book is slightly higher than the one in our course. The other items in the bibliography cover particular topics or applications.