Introduction; what is game theory? what is behavioral game theory? games on networks; game theory and corruption.
Behavioral game theory
This lecture focuses on mathematical descriptions of strategic situations in which payoffs to agents depend on the behavior of the other agents (applied to the analysis of conflict, cooperation, and corruption).
The best for the group comes when everyone in the group does what’s best for himself and the groupJohn Nash
Instructor: Jorge Finke
Office hours: TBD
Level: graduate
TA: TBD
OVERVIEW
| Week | Lectures |
|---|---|
| 1 | Lec 1 - Introduction |
| 2 | Lec 2 - Human decision-making |
| 3 | Lec 3 - Bayesian rationality |
| 4 | Lec 4 - Representations of a game |
| 5 | Lec 5 - Existence of solutions |
| 6 | Lec 6 - The ultimatum game |
| 7 | Lec 7 - Epistemic games |
| 8 | Lec 8 - Battle of the sexes |
| 9 | Lec 9 - Rationalizable strategies |
| 10 | Lec 10 - Common knowledge |
| 11 | Lec 11 - Backward induction |
| 12 | Lec 12 - Extensive form rationalizability |
| 13 | Lec 13 - Extensive form CKM |
| 14 | Lec 14 - Models of corruption |
| 15 | Lec 15 - Unification of behavioral sciences |
Lessons
Human decision-making
Decision theory and human decision-making; beliefs, preferences, and constraints; consistent preference orderings; utility functions.
Bayesian rationality
Bayesian rationality; Savage’s Axioms; expected utility principle (Savage’s Theorem); biases and heuristics; Prospect theory.
Representations of a game
Representing a game; extensive form game; normal form game; solution concepts; strict dominance; iterated dominance; Nash equilibria.
Existence of solutions
Mixed strategies, Nash equilibria (formal definition), the fundamental theorem; paradigmatic games.
The ultimatum game
Game theory an human behavior; conditions for altruism; the ultimatum game; norms of cooperation; the public goods game; implications for policy-making.
Epistemic games
Epistemic games; how to incorporate beliefs into games? An simple epistemic game.
Battle of the sexes
Epistemic games; an epistemic battle of the sexes.
Rationalizable strategies
Strategy elimination in normal form games; rationalizable Strategies; best response sets.
Common knowledge (CKM)
Common knowledge of rationality; example: the beauty contest.
Backward induction
Backwards induction (extensive form game); subgame perfect Nash equilibria; perfect Bayesian Nash equilibria
Extensive form rationalizability
Repeated games; Prisoner’s dilemma; extensive form CKR.
Extensive form CKM
Modal logic of knowledge; formalize extensive form CKR; CKR → backward induction.
Models of corruption
A model of reputation; honesty and corruption; social norms.
Unification of behavioral sciences
Common underlying model of human behavior? Evolutionary game theory; dynamical systems: equilibrium concepts; course review.