Game Theory – Lecture 1 – Introduction to Game Theory

Lecture Description

We introduce Game Theory by playing a game. We organize the game into players, their strategies, and their goals or payoffs; and we learn that we should decide what our goals are before we make choices. With some plausible payoffs, our game is a prisoners’ dilemma. We learn that we should never choose a dominated strategy; but that rational play by rational players can lead to bad outcomes. We discuss some prisoners’ dilemmas in the real world and some possible real-world remedies. With other plausible payoffs, our game is a coordination problem and has very different outcomes: so different payoffs matter. We often need to think, not only about our own payoffs, but also others’ payoffs. We should put ourselves in others’ shoes and try to predict what they will do. This is the essence of strategic thinking.

Course Description

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.

COURSE INDEX

Game Theory – Lecture 1 – Introduction to Game Theory
Game Theory – Lecture 2 – Putting Yourselves into Other People’s Shoes
Game Theory – Lecture 3 – Iterative Deletion and the Median-Voter Theorem
Game Theory – Lecture 4 – Best Responses in Soccer and Business Partnerships
Game Theory – Lecture 5 – Nash Equilibrium
Game Theory – Lecture 6 – Nash Equilibrium: Dating and Cournot
Game Theory – Lecture 7 – Nash Equilibrium: Shopping, Standing and Voting on a Line
Game Theory – Lecture 8 – Nash Equilibrium: Location, Segregation and Randomization
Game Theory – Lecture 9 – Mixed Strategies in Theory and Tennis
Game Theory – Lecture 10 – Mixed Strategies in Baseball, Dating and Paying Your Taxes
Game Theory – Lecture 11 – Evolutionary Stability: Cooperation, Mutation, and Equilibrium
Game Theory – Lecture 12 – Evolutionary Stability: Social Convention, Aggression, and Cycles
Game Theory – Lecture 13 – Sequential Games: Moral Hazard, Incentives, and Hungry Lions
Game Theory – Lecture 14 – Backward Induction: Commitment, Spies, and First-Mover Advantages
Game Theory – Lecture 15 – Backward Induction: Chess, Strategies, and Credible Threats
Game Theory – Lecture 16 – Backward Induction: Reputation and Duels
Game Theory – Lecture 17 – Backward Induction: Ultimatums and Bargaining
Game Theory – Lecture 18 – Imperfect Information: Information Sets and Sub-Game Perfection
Game Theory – Lecture 19 – Subgame Perfect Equilibrium: Matchmaking and Strategic Investments
Game Theory – Lecture 20 – Subgame Perfect Equilibrium: Wars of Attrition
Game Theory – Lecture 21 – Repeated Games: Cooperation vs the End Game
Game Theory – Lecture 22 – Repeated Games: Cheating, Punishment, and Outsourcing
Game Theory – Lecture 23 – Asymmetric Information: Silence, Signaling and Suffering Education
Game Theory – Lecture 24 – Asymmetric Information: Auctions and the Winner’s Curse

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