This is an archived course. A more recent version may be available at ocw.mit.edu.

 

Calendar

Recitations for this course meet for 1 hour each Friday.

Lec # Topics Key Dates

1

Introduction to Game Theory

 

2

Payoffs in Games: Rational Choice Under Uncertainty

Expected Utility Theory; Risk Aversion

 

3-5

A More Formal Introduction to Games

Extensive Forms and Normal Forms

Strategies, Dominant Strategies and Iterative Elimination of Strictly Dominated Strategies

Nash Equilibrium

Applications of Nash Equilibrium

 

6-8

Backward Induction and Subgame Perfection

Analysis of Extensive-Form Games

Backward Induction

Subgame Perfection

Applications

Bargaining and Negotiations

Forward Induction

Applications

Problem Set 1 due on Lecture 6

Problem Set 2 due two days after Lecture 8

9

Review

 

10

In Class Midterm Exam 1

 

11-12

Repeated Games and Cooperation

 

13-14

Incomplete Information

Bayesian Nash Equilibrium

Auctions

Applications

Problem Set 3 due on Lecture 14

15-16

Dynamic Games of Incomplete Information

Perfect Bayesian Equilibrium

Sequential Bargaining Under Asymmetric Information

Problem Set 4 due on Lecture 16

17

Review

 

18

In Class Midterm Exam 2

 

19-21

Problems of Asymmetric Information in Economics

Signaling and the Intuitive Criterion

Applications of Signaling

The Principal-Agent Problem

Applications; Lemons, Efficiency Wages, Credit-Rationing, Price-Discrimination

Problem Set 5 due on Lecture 21

22-23

Global Games

 

24-25

Evolutionary Foundations of Equilibrium

Evolutionarily Stable Strategies and Replicator Dynamics

Problem Set 6 due on Lecture 25

26-27

Applications and Review

Final Exam