Advanced Strategic Game Theory

Notices

The course will start on 2nd of April 2013.
The last lecture will take place Friday, 24th of May 2013.

The course will take place at Science Park:
Tuesdays 15-17 in the room A1.04
Fridays 11-13 in the room D1.114
(except April 26 - then it is in A1.04, and May 17 - then it is in D1.113)

Lecturer

Krzysztof R. Apt

Website of the course

website

Prerequisites

Really basic knowledge of linear algebra and calculus. Some maturity in following the mathematical arguments.

Objectives

The aim of this course is to introduce the main concepts concerned with strategic games (sometimes called non-cooperative games) and illustrate them by an analysis of various example games.

Strategic games deal with the analysis of interaction between rational players, where rationality is understood as utility maximization. In strategic games the players take their actions simultaneously and the utility (payoff) for each player depends on the resulting joint action.

The course will introduce the basic concepts, such as pure and mixed strategies, best response, Nash equilibrium, strictly and weakly dominated strategies, Pareto efficient outcome, rationalizability, pre-Bayesian games, and Bayesian games. Also other forms of equilibria will also be studied.

We shall discuss such well-known examples as the prisoner's dilemma, beauty contest games, and tragedy of the commons. Also, we shall use the introduced concepts to analyze some well-known examples of strategic games studied in economics: Cournot competition, Bernard competition and location game. Other classes of games will include congestion games and social network games.

Finally, we shall consider mechanism design, the aim of which is to arrange the economic interactions in such a way that when everyone behaves in a self-interested manner, the result is satisfactory for everybody.

Grading Information

Final grades (posted 4 June 2013)

5 problems 2 solve @ home; each worth 5 points.
Midterm exam: 25 points. It will take place Friday 26 April, 12:00 - 13:00 (so during the second hour of the lecture). Midterm exam with brief answers (on page 3).
Final exam: 50 points. It will take place Friday 31 May, 9:30 - 11:30 in the room A1.04. Final exam with brief answers (on pages 3 and 4).
Resit exam will take place Thursday 20 June, 14:00 - 16:00 in the room B1.19A.

Important notice: All exams are open book exams. Computers are also allowed.

Problems 2 solve

will be posted here.

Assignment 1	Deadline: 12 April 2013, 11:01 Solution
Assignment 2	Deadline: 19 April 2013, 11:01 Solution
Assignment 3	Deadline: 26 April 2013, 11:01 Solution
Assignment 4	Deadline: 14 May 2013, 15:01 Solution
Assignment 5	Deadline: 21 May 2013, 15:01 Solution

Note: you are welcome to send your solutions by email to the TA of the course, Facundo Carreiro. For his email see his homepage. Please use
subject: Solution to an assignment
or hand them in at the beginning of the lecture.
All email submissions will be acknowledged by email. So if you don't get any acknowledgement, please contact me.

Course material

- Resources on Game Theory

A chronology of game theory Paul Walker.
Equilibrium Points in N-Person Games John F. Nash.
A course in game theory M.J. Osborne and A. Rubinstein. MIT Press, 1994 (free download).
Game Theory .net ('A resource for educators and students of game theory')
Game Theory R. Aumann (An excellent survey of game theory, with fragments about strategic games.)
Games Chapter 6 from
D. Easley and J. Kleinberg, Networks, Crowds, and Markets: Reasoning About a Highly Connected World. Cambridge University Press, 2010.
Potential Games Chapter 8 from
S. Tijs, Introduction to Game Theory, Hindustan Book Agency, 2003.
Best-Response Dynamics and Nash equilibria pages 690-700 from
J. Kleinberg and E. Tardos, Algorithm Design. Addison-Wesley, 2005.
Modeling Network Traffic using Game Theory Chapter 8 from
D. Easley and J. Kleinberg, Networks, Crowds, and Markets: Reasoning About a Highly Connected World. Cambridge University Press, 2010.
Game Theory Text T. S. Ferguson (Parts II and III are about strategic games.)
Multiagent Systems, Algorithmic, Game-Theoretic, and Logical Foundations Y. Shoham and K. Leyton-Brown. Cambridge University Press, 2009 (free download).
Auctions Chapter 9 from
Yoram Bauman and Grady Klein, The Cartoon Introduction to Economics: Volume One: Microeconomics. Hill and Wang, 2010.

- Lecture Notes

from most of the lectures will be added here.

Nash Equilibria and Social Optima	notes
Strict Dominance	notes
Weak Dominance and Never Best Responses	notes
Regret Minimization and Security Strategies	notes
Strictly Competitive Games	notes
Mixed Extensions	notes
Elimination by Mixed Strategies	notes
Alternative Concepts	notes
Mechanism Design	notes

Lecture Notes as one file

- Slides

from some of the lectures will be added here.