2224.20 - Game Theory (elective course)

2224.20

Game Theory (elective course)

10

Completed upper secondary education. Intermediate microeconomics 1 and 2 are prerequisite for this course.

The objective of the course is to provide the students with insights into concepts, theories, and methods within the field of game theory and give the students ability to use these in practice.

The course considers game theory from in economics. Game Theory is the study of mathematical models of strategic decision making with interacting decision makers. In this course we introduce basic concepts and tools of game theory to solve economic quests for instance within the areas of industrial organization, macroeconomics and resource economics. The content are as follows: 1. Introduction to game theory 2. Strategic form games 3. Extensive form games 4. Games of incomplete information 5. Repeated games

Lectures, group work, exercises and presentations.

The student should become proficient in analysis and use of the theoretical concepts and mathematical models presented during the course in order to: • Demonstrate and articulate an understanding of a variety of game theoretic methods of analysing behaviour in strategic situations • Analyse different games and use a variety of tools to find equilibria. • Distinguish a game situation from a pure individual’s decision problem • Be able to explain the game theory concepts of players, strategies, payoffs, rationality, Nash equilibrium, etc. • Be able to explain concepts of dominant and dominated strategies, pure and mixed strategies, and best responses. • Be able to find dominant strategy equilibrium, pure and mixed strategy Nash equilibrium • Interpret the outcome of the analysis

Written 3 hour exam (closed-book).

External

7-

Joseph E. Harrington, Jr.: Games, Strategies, and Decision Making. Worth Publishers, 2009

Hans Ellefsen