Game Theory
Code: 102477 ECTS Credits: 6| Degree | Type | Year | Semester |
|---|---|---|---|
| 2501572 Business Administration and Management | OT | 4 | 0 |
| 2501573 Economics | OB | 3 | 2 |
Contact
- Name:
- Jordi Massó Carreras
- Email:
- Jordi.Masso@uab.cat
Use of Languages
- Principal working language:
- spanish (spa)
- Some groups entirely in English:
- Yes
- Some groups entirely in Catalan:
- Yes
- Some groups entirely in Spanish:
- Yes
Teachers
- Jordi Massó Carreras
- Marina Bannikova
Prerequisites
Introduction to Economics
Mathematics I and II
Microeconomics I and II
Objectives and Contextualisation
To learn the basic elements of game theory and to develop an understanding of its applications to economic analysis.
Non-cooperative games: Games in normal form and games in extensive form with perfect and imperfect information.
Solution concepts: Dominance, Nash equilibrium and subgame perfect Nash equilibrium.
Applications: Bargaining, Voting and Cost-sharing.
Cooperative games: Games in characteristic form, the core and the value of a game.
Competences
- Economics
- Capacity for adapting to changing environments.
- Demonstrate initiative and work individually when the situation requires it.
- Demonstrate understanding of the basic element of game theory and develop the habit of understanding its application in the solution of problems of economic analysis.
- Lead multidisciplinary and multicultural teams, implementing new projects and coordinating, negotiating and managing conflicts.
- Organise the work in terms of good time management, organisation and planning.
- Select and generate the information necessary for each problem, analyse it and take decisions based on that information.
- Take decisions in situations of uncertainty, demonstrating an entrepreneurial and innovative attitude.
- Understand the restrictions involved in negotiations process and how to arbitrate them.
- Use of the available information technology and adaptation to new technological environments.
- Value ethical commitment in professional practice.
Learning Outcomes
- A capacity of oral and written communication in Catalan, Spanish and English, which allows them to summarise and present the work conducted both orally and in writing.
- Analyse the distribution of costs in view of the implementation of a new shared service.
- Analyse the strategic interactions between participants and the effects of their actions on third-party decisions.
- Apply the game theory to economic and business decisions.
- Apply the game theory to the case of agents in a negotiation, in auctions and in macroeconomic matters.
- Assess ethical commitment in professional activity.
- Assess the consequences of changing a particular representation system for another.
- Assess the different proposals of implementing public goods in terms of social welfare.
- Capacity to adapt to changing environments.
- Demonstrate initiative and work independently when required.
- Lead multidisciplinary and multicultural teams, implement new projects, coordinate, negotiate and manage conflicts.
- Make decisions in situations of uncertainty and show an enterprising and innovative spirit.
- Organise work, in terms of good time management and organisation and planning.
- Select and generate the information needed for each problem, analyse it and make decisions based on this information.
- Understand the different voting systems and the consequences of each of these.
- Use available information technology and be able to adapt to new technological settings.
Content
Module 1. Introduction to Game Theory and Examples
- The aim of Game Theory
- Decision Theory with one agent
- Decision Theory with at least two agents: Game Theory
- History of Game Theory
- Non-Cooperative Games versus Cooperative Games
- Examples
Module 2. Games in Normal Form
- Definition and examples
- Nash equilibrium
- Interpretations and problems of Nash equilibrium
- The mixed extension of a game
- Existence of Nash equilibrium: The Nash Theorem
- Computing Nash Equilibria
Module 3. Games in Extensive Form
- Preliminaries
- Perfect information
- Backwards induction,Nash equilibrium and Kuhn’s Theorem
- Imperfect information
Module 4. Nash equilibrium and related issues
- Introduction
- Dominant strategies
- Elimination of dominated strategies
- Subgame perfect equilibrium
Module 5. Cooperative Games
- Preliminaries
- The Core
- The Shapley value
Module 6. Applications
- Axiomatic and strategic bargaining
- Voting
- Dominant strategy implementation
- Cost-sharing
Methodology
This course combines lectures with more applied sessions devoted to the resolution of problem sets and exercises.
Activities
| Title | Hours | ECTS | Learning Outcomes |
|---|---|---|---|
| Type: Directed | |||
| Exercises and group discussions | 10.5 | 0.42 | 2, 3, 4, 5, 15, 7, 8 |
| Lectures | 33 | 1.32 | 2, 3, 4, 5, 15, 7, 8 |
| Type: Supervised | |||
| Tutorials | 15 | 0.6 | 2, 3, 4, 5, 9, 1, 15, 10, 11, 13, 12, 14, 16, 6, 7, 8 |
| Type: Autonomous | |||
| Readings | 15 | 0.6 | 9, 1, 10, 11, 13, 12, 14, 16, 6 |
| Study. Preparation of exercises and discussions | 70.5 | 2.82 | 2, 3, 4, 5, 9, 1, 15, 10, 11, 13, 12, 14, 16, 6, 7, 8 |
Assessment
Evaluation
There will be a continuous assessment of student progress by way of two partial exams, a final exam and three quizzes. Final grades will be computed according to the weights of 48% the final exam, 20% each partial exam and 4% each quiz.
A student will only be eligible to the “not evaluable” status if he or she has not taken part in any of the assesments.
Calendar of evaluation activities
The dates of the evaluation activities (midterm exams, exercises in the classroom, assignments, ...) will be announced well in advance during the semester.
The date of the final exam is scheduled in the assessment calendar of the Faculty.
"The dates of evaluation activities cannot be modified, unless there is an exceptional and duly justified reason why an evaluation activity cannot be carried out. In this case, the degree coordinator will contact both the teaching staff and the affected student, and a new date will be scheduled within the same academic period to make up for the missed evaluation activity." Section 1 of Article 115. Calendar of evaluation activities (Academic Regulations UAB). Students of the Faculty of Economics and Business, who in accordance with the previous paragraph need to change an evaluation activity date must process the request by filling out an Application for exams' reschedule https://eformularis.uab.cat/group/deganat_feie/application-for-exams-reschedule
Grade revision process
After all grading activities have ended, students will be informed of the date and way in which the course grades will be published. Students will be also be informed of the procedure, place, date and time of grade revision following University regulations.
Retake Process
All students are required to perform the evaluation activities. If the student's grade is 5 or higher, the student passes the course and it cannot be subject to further evaluation. If the student grade is less than 3.5, the student will have to repeat the course the following year. Students who have obtained a grade that is equal to or greater than 3.5 and less than 5 can take a second chance exam. The lecturers will decide the type of the second chance exam. When the second exam grade is greater than 5, the final grade will be a PASS with a maximum numerical grade of 5. When the second exam grade is less than 5, the final grade will be a FAIL with a numerical grade equal to the grade achieved in the course grade (not the second chance exam grade).
A student who does not perform any evaluative task is considered “not evaluable”, therefore, a student who performs a continuous assessment component can no longer be qualified with a "not evaluable".
The date of the retake exam will be posted in the calendar of evaluation activities of the Faculty.
Irregularities in evaluation activities
In spite of other disciplinary measures deemed appropriate, and in accordance with current academic regulations, "in the case that the student makes any irregularity that could lead to a significant variation in the grade of an evaluation activity, it will be graded with a 0, regardless of the disciplinary process that can be instructed. In case of various irregularities occur in the evaluation of the same subject, the final grade of this subject will be 0". Section 10 of Article 116. Results of the evaluation. (UAB Academic Regulations).
Assessment Activities
| Title | Weighting | Hours | ECTS | Learning Outcomes |
|---|---|---|---|---|
| Delivery and correction of exercises | 12% | 1 | 0.04 | 2, 3, 4, 5, 9, 1, 15, 10, 11, 13, 12, 14, 16, 6, 7, 8 |
| Final exam | 48% | 2 | 0.08 | 2, 3, 4, 5, 9, 1, 15, 10, 11, 13, 12, 14, 16, 6, 7, 8 |
| Partial exams | 40% | 3 | 0.12 | 2, 3, 4, 5, 9, 1, 15, 10, 11, 13, 12, 14, 16, 6, 7, 8 |
Bibliography
Basic references
- Roy Gardner. Games for Business and Economics. John Wiley & Sons, Inc. (1995).
- Robert Gibbons. A Primer in Game Theory. Princeton University Press (1992).
- Martin J. Osborne. An Introduction to Game Theory. Oxford University Press (2004).
Advanced references
- Michael Maschler, Eilon Solan, and Shmuel Zamir. Game Theory. Cambridge University Press (2013).
- Roger B. Myerson. Game Theory: Analysis of Conflict. Harvard University Press (1991).
- Martin J. Osborne and Ariel Rubistein. A Course in Game Theory. The MIT Press (1994).
- Fernando Vega Redondo. Economics and the Theory of Games. Cambridge University Press (2003).