Course content

Week 1 (13, 14 and 15 September)

  • Strategic games with ordinal preferences and examples
  • The concept of Nash equilibrium
  • Best response functions
  • Dominated and dominant actions

Main reference: M.J. Osborne, Introduction to Game Theory, chapter 2

Problem Set 0: PS0

Problem Set 1: PS1 (Students are reminded that Prof. Osborne does not allow for solutions to exercises to be published)

Week 2 (20 and 22 Sept) and week 3 (27 and 29 Sept)

  • Static oligopoly games with simultaneous moves: Cournot and Bertrand oligopoly games
  • First- and second-price auctions with complete information (Tsukiji Fish Market here)
  • Political competition
  • The War of Attrition
  • An Introduction to Multiunit Auctions (slides)

Main reference: M.J. Osborne, Introduction to Game Theory, chapter 3

Problem Set 2: PS2

Problem Set 3: PS3

Week 4 (4 and 6 Oct) and week 5 (11 and 13 Oct)

Problem Set 4: here is the amended PS4

The Good Samaritan Game

An simple auction with entry cost

Main reference: M.J. Osborne, Introduction to Game Theory, chapter 4

Week 6 (18 and 20 Oct)

  • Extensive games with perfect information (finite horizon)
  • The concept of subgame perfect equilibrium
  • Illustrations: The Stackelberg duopoly, Entry games, the ultimatum game

The split-the-cake game

Main reference: M.J. Osborne, Introduction to Game Theory, chapter 5 and 6

Week 7 (27 and 29 Oct)

Main reference: M.J. Osborne, Introduction to Game Theory, chapter 7

The midterm exam will take place on Wednesday, 2 November at 3pm

A mock midterm exam paper is here

Problem Set 5: PS5

Week 9 (8 and 10 Nov) and week 10 (15 and 17 Nov)

  • Bayesian games; A simple example (BoS under asymmetric information)
  • Applications: Auctions under incomplete information (Useful mathematical expressions) (deriving a symmetric equilibrium of the N-bidder first-price auction with uniformly distributed private values: here)

Main reference: M.J. Osborne, Introduction to Game Theory, chapter 9

Problem Set 6: PS6

Problem Set 7: PS7

Week 11 (22 Nov and 24 Nov) 

  • An introduction to repeated games
  • Grim trigger and tit-for-tat strategies
  • Nash equilibria
  • Application to collusion in oligopolistic markets (slides)
  • The Economics of Tacit Collusion (link to the paper)

Main reference: M.J. Osborne, Introduction to Game Theory, chapter 14 (until section 14.7)

Problem Set 8: PS8

Week 12 (29 Nov and 1 Dec)

Two tutorial classes and one lecture devoted to the solution of a mock final exam paper  

A mock exam paper is here.  To make it more effective, each student is advised to work on his/her own for 2 hours, attempting to reproduce the real exam environment. Solutions will be discussed on Thursday, 1 December from 10am until 11:30am.

One more mock exam question here

Answers to the 20-Dec exam paper questions here

Answers to the 2-Feb-2017 final exam paper here

News

Students will receive the marks of the IO&CT (T032) and IO&CT (AM1) exam papers on Wednesday 7 June (late evening)

I will be available on Friday 9 June from 4pm until 5.30pm (4th floor lecture theatres building in Viale Romania) for answering any question about the exam papers marking