ULMS Electronic Module Catalogue
The information contained in this module specification was correct at the time of publication but may be subject to change, either during the session because of unforeseen circumstances, or following review of the module at the end of the session. Queries about the module should be directed to the member of staff with responsibility for the module.
Title Game Theory with Applications
Code ECON813
Coordinator Dr CW Bach
Economics
C.W.Bach@liverpool.ac.uk
Year CATS Level Semester CATS Value
Session 2023-24 Level 7 FHEQ First Semester 15

Pre-requisites before taking this module (other modules and/or general educational/academic requirements):
 

Modules for which this module is a pre-requisite:
 

Programme(s) (including Year of Study) to which this module is available on a required basis:
 

Programme(s) (including Year of Study) to which this module is available on an optional basis:
 

Teaching Schedule
  Lectures Seminars Tutorials Lab Practicals Fieldwork Placement Other TOTAL
Study Hours 20

 5

         25
Timetable (if known)              
Private Study 125
TOTAL HOURS 150

Assessment
EXAM Duration Timing
(Semester)		 % of
final
mark		 Resit/resubmission
opportunity		 Penalty for late
submission		 Notes
Examination There is a resit opportunity. Standard UoL penalty applies for late submission. This is an anonymous assessment.  2    80       
Mid-term test. There is a resit opportunity. Standard UoL penalty applies for late submission. This is an anonymous assessment.  1    20       
CONTINUOUS Duration Timing
(Semester)		 % of
final
mark		 Resit/resubmission
opportunity		 Penalty for late
submission		 Notes
             

Aims

The objective of the module is to provide a graduate level and modern introduction to game theory. This is the study of strategic interactions, i.e. situations where outcomes depend not only on our own actions but also on those of others. In particular, students will be taught how to apply game theory to a range of economic, business, everyday and social contexts.

Learning Outcomes

(LO1) Students will be able to conduct advanced strategic analysis by modelling a game and possible reasoning concepts and inferring behavioural predictions.

(LO2) Students will be able to distinguish between types of games.

(LO3) Students will be able to apply games in a range of economic, business and social contexts.

(S1) Analytical and problem solving skills.
Students will be taught analytical skills to solve problems using game theory.

(S2) Numeracy.
Students will be taught to mathematically analyse and solve problems.

(S3) Communication skills.
Students will be taught to describe strategic interactions in a precise manner.

Teaching and Learning Strategies

2 hour lecture x 10 weeks
1 hour seminar x 5 weeks
125 hours self-directed learning

Syllabus
 

Static Games:

Normal Form;
PART I – (weeks 1—5) built along the following core concepts:

Rational Choice;
Common Belief in Rationality;
Iterated Strict Dominance;
Simple Belief Hierarchies;
Nash Equilibrium;
Generalised Iterated Strict Dominance;
Bayesian Equilibrium;
Generalised Nash Equilibrium.

PART II – (weeks 7—11) built along the following core concepts:

Dynamic Games: Nash equilibrium and backward induction, threats and credible threats, subgames and subgame perfect equilibrium.

Applications: Software games with certain and uncertain demand, moral hazard and incomplete insurance, a strategic role for futures contracts, a strategic role for option contracts, risk shifting or asset substitution, product market imperfections and loan commitments, bank run and auction.

Repeated Games with complete information: Finitely repeated games, infinitely repeated games, folk theorems.

A pplications: A strategic role for futures contracts revised, relationship banking, Cournot duopoly game without pre-commitment, Cournot duopoly game with precommitment.

Recommended Texts
Reading lists are managed at readinglists.liverpool.ac.uk. Click here to access the reading lists for this module.