Game Theory Ming-hung Weng

Course Syllabus Office Hours: in Room (6th floor of Yun-Ping Building) Office Hours: in Room (6th floor of Yun-Ping Building) Tuesdays PM, other time by appointment. Tuesdays PM, other time by appointment. Website: m Website: m m m

Required Text Required Text Games of Strategy, 2nd edition, Avinash Dixit & Susan Skeath. (2003) Norton ( 華泰代理 ) Suggested Text Suggested Text A Primer in Game Theory, Robert Gibbons, Harvester Wheatsheaf. Game Theory, Drew Fudenberg and Jean Tirole, The MIT Press.

Course Objectives Course Objectives Game theory, within the last several decades, has grown into one of the most important and popular tools used in understanding the interactions between individuals, institutes, or countries, especially in the fields of economics, business, politics and biology. Though it is based on a strong mathematic foundation, this course aims at providing the introductory concepts and techniques to the undergraduate students. The first half of this course will be devoted to explore the structure of the game by introducing different forms and styles of them and their solution concepts. The class will turn its focus on several popular applications of game theory during the second half after students getting more familiar with the solution concepts.

Course Evaluation Course Evaluation Homework20% Homework20% Term Paper10% Term Paper10% Presentation5% Presentation5% Class Participation 5% Class Participation 5% Midterm 30% Midterm 30% Final 30% Final 30%

First of all, since this is an English-lectured class, all assignments and tests should be completed in English. First of all, since this is an English-lectured class, all assignments and tests should be completed in English. Homework: There ’ ll be homework assigned for each chapter covered. Homework needs not be handed in. However, there ’ ll be a short quiz when the assignment is due with questions coming exactly from the homework. The lowest grades will be excluded when evaluating the average, which will weight 20% of the overall grades. Homework: There ’ ll be homework assigned for each chapter covered. Homework needs not be handed in. However, there ’ ll be a short quiz when the assignment is due with questions coming exactly from the homework. The lowest grades will be excluded when evaluating the average, which will weight 20% of the overall grades.

Term Paper: By Dec 24th, students will form groups (2-3 students) to submit a short (3-10 pages, 11-pt-font, single-line spaced) paper where they apply their concepts and techniques of game theory to explain phenomenon(s) they observe from their daily lives, the news or the history. Term Paper: By Dec 24th, students will form groups (2-3 students) to submit a short (3-10 pages, 11-pt-font, single-line spaced) paper where they apply their concepts and techniques of game theory to explain phenomenon(s) they observe from their daily lives, the news or the history. Presentation: After receiving some comments from the instructor, each group will have an in-class presentation (10-15 minutes, in English) with PowerPoint to demonstrate and justify the observation in their paper. Presentation: After receiving some comments from the instructor, each group will have an in-class presentation (10-15 minutes, in English) with PowerPoint to demonstrate and justify the observation in their paper.

Class Participation: This part will basically evaluate students ’ attendances and performance in the class. Class Participation: This part will basically evaluate students ’ attendances and performance in the class. Midterms: There ’ ll be one midterm and one final. Both are mandatory. Midterms: There ’ ll be one midterm and one final. Both are mandatory.

About Game Theory John Forbes Nash Jr., A Beautiful Mind John Forbes Nash Jr., A Beautiful Mind

John von Neumann and Oskar Morgenstern book Theory of Games and Economic Behavior John von Neumann and Oskar Morgenstern book Theory of Games and Economic Behavior John von NeumannOskar MorgensternTheory of Games and Economic Behavior John von NeumannOskar MorgensternTheory of Games and Economic Behavior Antoine Augustin Cournot's Antoine Augustin Cournot's Antoine Augustin Cournot Antoine Augustin Cournot Researches into the Mathematical Principles of the Theory of Wealth) in 1838 Eric Maskin Eric Maskin

What to expect from learning game theory? What to expect from learning game theory?

What is a game? Models analyzing interactions among parties or individuals. Models analyzing interactions among parties or individuals. How do they interact? How do they interact? Simultaneous moves (Static Games) Sequential moves (Dynamic Games) How long do they interact? How long do they interact? One-shot Games Repeated Games (finite/infinite periods)

How are their interests related? How are their interests related? Zero (Constant) sum game Nonzero (Nonconstant) sum game How well do they observe each other ’ s moves? How well do they observe each other ’ s moves? Perfect information game Imperfect information game

How well do they know the game played? How well do they know the game played? Complete information Incomplete (asymmetric) information

Terminologies Strategies Strategies A complete plan of actions Pure vs. mixed strategies Payoffs PayoffsUtility Rationality Rationality Utility maximizer

Common Knowledge of Rules Common Knowledge of Rules Knowing each other knowing how the game is played and etc. Equilibrium Equilibrium Nash Equilibrium and etc. Observation and Experiment Observation and Experiment Traveler ’ s dilemma