The objective of the module is to provide an introduction to game theory. This is the study of strategic interactions ie situations where outcomes depend not only on our own actions but also how others react to our actions. This module complements those in core macro and microeconomics and offers more insight into strategic decisions and competitive behaviour in general.

(LO1) Students will be able to distinguish between types of games

(LO2) Students will be able to explain game theoretical concepts

(LO3) Students will be able to conduct advanced microeconomic analysis by formulating a game and its associated solution concepts and deriving solutions to games

(LO4) Students will be able to apply games in a range of economic, business and social contexts

(LO5) Students will be able to explain the importance of game theoretic approaches in economic analysis

(S1) Problem Solving Skills

(S2) Numeracy

(S3) Commercial Awareness

(S4) Teamwork

(S5) Communication skills

(S6) Lifelong learning skills

Teaching Method: Lecture
Scheduled Directed Student Hours: 22
Attendance Recorded: No

Teaching Method - Seminar
Scheduled Directed Student Hours: 5
Attendance Recorded: Yes

Self-Directed Learning Hours: 123
Description: These independent learning hours are aimed at supporting the directed student learning. The module leader will provide guidance in the form of suggested readings and topics to examine with the expectation that students are well prepared to contribute to the seminar activities and to understand the content of lectures. Self-Directed Learning will include research activity, developing academic writing skills, and wider reading to support the module

PART I – Static Games
Teams of students will be guided through solutions to the seminar questions.
There will be an online assessment (Midterm) , with 2 hours to complete.

PART II – Dynamic Games
Teams of students will be guided through solutions to the seminar questions.
There will be a CEO guest lecture of a an economic consulting firm in Part II and an economic consulting networking event

There are the following non-modular requirements:
ECON112 with either ECON111 or ECON113

Skills/Other Attributes Mapping

Skills / attributes: Numeracy
How this is developed: Mathematical and logical methodology is taught and trained in the course.
Mode of assessment (if applicable): Examination and Mid-Term

Skills / attributes: Problem Solving Skills
How this is developed: Numerous exercises are posed that the students can try themselves and then solutions to the problems are explained and published.
Mode of assessment (if applicable): Examination and Mid-Term

Skills / attributes: Commercial Awareness
How this is developed: In the economic consulting event various commercial ventures where game theory have been successfully used are presented.
Mode of assessment (if applicable):

Skills / attributes: Teamwork
How this is developed: The students are encouraged to work together on the problems for the exercises in small teams.
Mode of assessment (if applicable):

Skills / attributes: Communication Skills
How this is developed: The students will learn how to ask analytical questions in a clear way during lectures and exercise sessions.
Mode of assessment (if applicable):

Skills / attributes: Lifelong Learning Skills
How this is developed: the intelligence of the students is enhanced beyond their graduation with this course by exposing them and training them in rigorous thinking by understanding and composing small proofs.
Mode of assessment (if applicable):

List of Topics

GAMES AND DOMINATION
1.Introduction to Strategic Games
2.Dominated Strategies
3.Game: Prisoners' Dilemma
4.Iterated Elimination of Dominated Strategies

BEST RESPONSES AND NASH EQUILIBRIUM
1.Best Responses
2.Game: Price Competition with Differentiated Products
3.Nash Equilibrium
4.Game: Cournot Competition

APPLICATIONS OF NASH EQUILIBRIUM
1.The Non-cooperative Foundation of Perfect Competition
2.Game: The Problem of the Commons
3.Game: Auctions

MIXED STRATEGIES
1.Mixed Strategies
2.Mixed Strategy Nash Equilibrium
3.The Fundamental Lemma
4.Existence of Nash Equilibrium

APPLICATIONS OF MIXED STRATEGY NASH EQUILIBRIUM
1.Recap: Interpretation of Mixed Strategies
2.Game: Inspection Games
3.Game: Civic duty and Genovese syndrome

BACKWARD INDUCTION AND SPNE
1. Game: A Venture Capital game
2. Backward Induction
3.Game: Stackelberg competition
4.Sub game Perfect Nash Equilibrium

SPNE AND APPLICATIONS
1.Extensive Games
2.Game: Strategic Investment
3.Game: Sequential Bargaining
4.Game: Tariffs and International Competition

STATIC GAMES OF INCOMPLETE INFORMATION
1.Static Bayesian Games
2.Bayesian Nash Equilibrium
3.Game: Cournot competition with cost uncertainty

APPLICATION OF BAYESIAN GAMES
1.Harsanyi’s Purification Theorem
2.Second-Price Auction with incomplete information
3.First-Price Auction with incomplete information

DYNAMIC GAMES OF INCOMPLETE INFORMATION
1.Perfect Bayesian Equilibrium
2.Information Unravelling and Signalling
3.Game: Job Market signalling