Games and Decisions
Instructors: Dino Gerardi and Paolo Ghirardato
NEWS:
PAOLO GHIRARDATO'S OFFICE HOURS:
Starting March 2012, Prof. Ghirardato will meet students by appointment (send an email).
DINO GERARDI'S OFFICE HOURS:
Starting March 2012, Prof. Gerardi will meet students by appointment (send an email).
SYLLABUS: This is a course which introduces students to the formalization and analysis of decision making both in a single-person and in a strategic (i.e., game theory) environment. While the course's emphasis is on theoretical issues, some attention is also given to the application of concepts to business, economic and financial problems.
The course is divided in two parts:
Part 1: Decisions (Ghirardato)
- Introduction and overview of decision models
- Known probabilities: The Expected Utility Model
- Subjective probability: The Subjective Expected Utility model (Anscombe-Aumann and Savage)
- Non-expected utility models: The Allais and Ellsberg paradoxes and their rationalizations
Part 2: Games (Gerardi)
- A decision-theoretic approach: Dominance, beliefs and "Never Weak Best Response" strategies
- Strategic form games: Dominance, Nash equilibrium, mixed strategies
- Extensive Form Games: Corresponding strategic forms, behavioral strategies, backwards induction, subgame perfect equilibrium
- Games of Incomplete Information: Normal-form representation of static games of incomplete information, Bayesian Nash equilibrium, perfect Bayesian equilibrium
- Repeated Games: Folk theorems
The exam is mostly going to be based on the class notes and some readings assigned in class. However, for supplemental reading (and some homework exercises) the following are the suggested textbooks for the course:
- David Kreps, Notes on the Theory of Choice, Westwood Press, 1988 (hard, but good as reference)
- Martin J. Osborne, An Introduction to Game Theory, Oxford University Press, 2003 (easier)
- Martin J. Osborne and Ariel Rubinstein, A Course in Game Theory, The MIT Press, 1994 (harder, but available electronically here)
EXERCISES: The following exercises (to appear soon!) are very important as practice and verification of your understanding of the course material.
Part I (Decisions):
Part II (Games):
PAST EXAMS: These are the first official exams for this course.
CONTACTS
ghirardato at econ.unito.it
dino.gerardi at carloalberto.org
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Created: 08/10/10. Last revised: 24/02/12