This course is an introduction to game theory and strategic thinking. Ideas such as dominance, backward induction, Nash equilibrium, evolutionary stability, commitment, credibility, asymmetric information, adverse selection, and signaling are discussed and applied to games played in class and to examples drawn from economics, politics, the movies, and elsewhere.
Introduction: five first lessons
Putting yourselves into other people's shoes
Iterative deletion and the median-voter theorem
Best responses in soccer and business partnerships
Nash equilibrium: bad fashion and bank runs
Nash equilibrium: dating and Cournot
Nash equilibrium: shopping, standing and voting on a line
Nash equilibrium: location, segregation and randomization
Mixed strategies in theory and tennis
Mixed strategies in baseball, dating and paying your taxes
Evolutionary stability: cooperation, mutation, and equilibrium
Evolutionary stability: social convention, aggression, and cycles
Sequential games: moral hazard, incentives, and hungry lions
Backward induction: commitment, spies, and first-mover advantages
Backward induction: chess, strategies, and credible threats
Backward induction: reputation and duels
Backward induction: ultimatums and bargaining
Imperfect information: information sets and sub-game perfection
Subgame perfect equilibrium: matchmaking and strategic investments
Subgame perfect equilibrium: wars of attrition
Repeated games: cooperation vs. the end game
Repeated games: cheating, punishment, and outsourcing
Asymmetric information: silence, signaling and suffering education
Asymmetric information: auctions and the winner's curse