United Kingdom, London

Game Theory

when 15 July 2018 - 4 August 2018
language English
duration 3 weeks
credits 7.5 EC
fee GBP 1995

Conflict exists not just in most economic scenarios but in almost every human interaction, be it economic, political or social and this course will adopt that broad perspective in developing analyses, results and insights.

This course is designed for students with a background in Economics or Mathematics and will be taught at the intermediate level. The topic of this course, Game Theory, is an essential tool for analyzing strategic interactions between economic agents. It can help us explain anything from why farmers overgraze a common piece of land to the price at which a buyer and seller agree to trade. This course equips students with the skills to use game theory to model real world scenarios and apply game theoretic methods to solve these models.

This course is aimed at students studying Economics but it is also suitable for Mathematics students.

During this course students will be exposed to non-cooperative game theory, evolutionary game theory and cooperative game theory. Throughout the majority of the course, we assume hyper-rational agents acting in their own interest as we give students a firm grounding in the logic and methods of non-cooperative game theory. We apply standard techniques such as domination of strategies, Nash Equilibrium and backwards induction across a wide variety of games. When relaxing this hyper-rationality assumption, students will then see how evolutionary game theory gives very similar predictions and thus offers a second justification of Nash Equilibrium. Although, we go slightly further to argue that some equilibria are more stable than others.

As will be seen, in many games like the Prisoner’s Dilemma, game theory predicts suboptimal outcomes, since each agent acts in their self-interest, which may not be the common interest. One way to escape this is to allow agents to write binding contracts with each other, which enables us to shift the focus from strategies to payoffs. We take a brief venture into cooperative game theory to see how agents will split the gains from forming coalitions.

One common application of game theory is to bargaining. This pertains to any situation whereby two or more agents have an incentive to reach a mutually beneficial agreement, but conflicting interests over the terms of such an agreement. Students will see some of the myriad of situations bargaining theory can be applied to and learn what predictions bargaining theory can help us make about how these situations will be resolved.

The topics to be covered include:

What game theory is about and why it is “right”
How to translate a real world scenario into a game theoretic model
Expected utility theory
Simultaneous and sequential move games
Nash Equilibrium
Domination of strategies
Backwards Induction
Games of Incomplete Information
Mixed strategies
Evolutionary game theory
Cooperative game theory
Models of bargaining
Bertrand Model
Cournot Model
Repeated Games

Course leader

Professor Ken Binmore, CBE, Professor Abhinay Muthoo and Dr James Massey

Target group

Economics and Mathematics UG and PG students

Course aim

As students will discover, game theory is an essential tool for understanding of a wide range real world phenomena. Among others, this course aims to answer three vital questions:

What is game theory about?
How do I apply game theory?
Why is game theory right?

Students should develop an appreciation for how the details of a game such as when players move and why they know can have a large impact on outcomes.

This course aims to equip students with a wide range of game theoretic skills, which will be used in formulating and solving models of their own. By exposing students to a wide variety of topics and applications, this course gives students some idea of the vast range of phenomena one can use game theory to model and explain. This course will also improve powers of logic and encourage students to think strategically in their future everyday life.

Credits info

7.5 EC
-Equivalent of a 15 CAT module from an Undergraduate Degree.
-European system: 7.5 ECTS
-US system: approximately 3 credits.

Fee info

GBP 1995: Tuition Fee (various discounts available including early booking 10% reduced fee)

Scholarships

- If you apply before the 30 April 2018 you will be given a 10% discount code to enter at our payment pages.
- For groups of 5 or more students from the same institution, Warwick partners and alumni we offer a 20% discount on tuition fees and a tuition