Econ 603 - Microeconomic Theory - Game Theory - Spring 2009

Instructor: Tanya S. Rosenblat
Office: 460A Heady Hall
Phone: 294 - 5028
Email: tanyar@iastate.edu (best way to contact me)
Office Hours: M, F 3--4pm, or by appointment.
Course Website: http://www.public.iastate.edu/~tanyar/econ603/econ603.html

Teaching Assistant: Jingbo Cui
TA Office: 280D Heady Hall
TA Phone: 294-2177
TA Email: jbcui@iastate.edu
TA Office hours: T Th 1-3 pm or by appointment.

Class schedule: MW 1:10-3pm, Heady 272
TA Session: F 1:10-3pm, Heady 272
Grading: ~30% problem sets; ~70% final exam (covering game theory).
Your grade for general equilibrium and game theory will be weighted equally. Prof. Lapan and I will jointly determine your final grade based upon your grade for each half of the course.

Homework: (~30%)
In order to learn the material it is absolutely essential to do the problem sets. You may work with other students, but the work submitted should be your own and not a copy of someone else’s work.

Exam (~70%)
The exam for this part of the course will be in the evening, at a date and time to be arranged.

Course description:
This course offers an introduction to non-cooperative game theory. The course is intended both for graduate students who wish to develop a solid background in game theory in order to pursue research in the applied fields of economics and related disciplines, and for students wishing to specialize is economic theory.

Game theory is the analysis of strategic interaction among individual agents.  Game theory seeks to provide models of conflict and cooperation that are relevant in a large class of situations basic to almost all social sciences.  It offers insight into economic, political or social situations in which individuals have different goals and preferences.  The basic assumptions of game theory are that decision-makers pursue well-defined objectives (they are rational) and take into account their knowledge or expectations of other decision-makers' behavior (they are strategic).

The supplemental primary text for the course is Drew Fudenberg and Jean Tirole’s text, Game Theory. This is a more theoretical text which is also used in advanced graduate courses in game theory. Alternatively, you may want to consult Robert Gibbons’ Game Theory for Applied Economists. Gibbons’ book contains more readable discussions of the material and a lot of nice examples, but omits a few of the topics we will cover. The tentative course outline with corresponding readings is as follows.

Tentative Outline:

Part I. Static Games.

      A. Modeling strategic interaction. (FT 1.1; G l.lAB)
      B. Nash Equilibrium. (FT 1.2; G l.lC, 1.2)
      C. Mixed strategies. (FT 1.1, 1.2.3; G 1.3)
      D. Existence theorems, other properties. (FT 1.3, 12.1; G 1.3)
      E. Zero-sum games.
      F. Correlated equilibrium. (FT 2.2)

Part II. Dynamic Games.

      A. Extensive form games. (FT 3.3, 3.4.2, 3.5; G 2.1, 2.4)
      B. Subgame perfection. (FT 3.5; G 2.2)
      C. Repeated games. (FT 4.2, 4.3, 5.1, 13.1.1; G 2.3)

Part III. Static Games of Incomplete Information.

      A. Types, Bayesian equilibrium (FT 6.1-6.4; G 3.1-3.2)
      B. Examples (FT 6.1-6.2, 6.5)

Part IV. Dynamic Games of Incomplete Information.

      A. PBE concept and signalling (FT 8.1-8.2)
      B. Reputation (FT 9.1-9.2; G 4.1-4.2, 4.3C)

Primary Game Theory References:

Fudenberg and Tirole (FT), Game Theory , MIT Press, 1991.
Gibbons (G), Game Theory for Applied Economists , Princeton University Press, 1992.

Other Useful Game Theory Sources:

Mas-Colell, Whinston and Green, Microeconomic Theory, Oxford University Press,1995.
Osborne and Rubinstein, A Course in Game Theory, MIT Press, 1994.
Myerson, Game Theory: Analysis of Conflict, Harvard University Press, 1997.
Camerer, Behavioral Game Theory: Experiments in Strategic Interaction, The Roundtable Series in Behavioral Economics, Princeton University Press, 2003.

Disabilities statement:
It is Iowa State’s policy to help students with disabilities.
Please contact me and/or Disability Resources Office, 1076 Student Services Building, 294-6624.

Miscellaneous:
1.   It is highly recommended that you attend all lectures and one weekly review session. Students are responsible for material covered and announcements made in class. If you cannot attend a lecture, please notify me by email in advance.
2.   When contacting me by email include “Economics 603 – Question about …” in the subject line. I will typically respond to all email inquiries within 48 hours.
3.   Feedback is appreciated at any time!

Last updated: Sunday, March 8, 10:00pm