Washington State University

School of Economic Sciences

Strategy and Game Theory

EconS 424, Spring 2015

    1. Syllabus - EconS 424

    2. Class slides. (All slides, Spring 2014 semester. Large file: 1,804 slides).

    3. Class slides classified by topics:

      1. Introduction to games, ingredients, and representation. Link.

      2. Dominance solvable games: application of IDSDS and IDWDS. Link.

      3. Nash equilibrium in games with two players. Link.

        • Application: Collusion and corporate leniency programs. Link.

        • Handout on IDSDS and Rationalizability with examples. Link.

      4. Nash equilibrium in games with N players. Link.

        • Application: Strategizing in courses that curve grades. Link.

      5. Nash equilibrium with continuous action spaces. Link.

        • Application: Average bid auctions in Italian cities. Link.

      6. Mixed strategy equilibria (msNE) with two players. Link.

        • Application: Sticking to your strategy. Link.

      7. Mixed strategy equilibria (msNE) with N players. Link.

      8. Strictly competitive games, and max-min strategies. Link.

      9. Sequential-move games, and subgame perfect equilibrium (SPNE). Link.

        • Application: Checkers is Solved. Link.

        • Application: "Split or Steal" in Golden Balls. Link. 

      10. Strategic pre-commitment. Link.

      11. Bargaining games over finite and infinite periods. Link.

      12. Repeated games:

        • Introduction to Finitely and Infinitely Repeated games. Link.

        • Extensions (Imperfect monitoring, "stick and carrot" strategies, etc.). Link.

        • Overlapping generations models. (Optional reading.) Link.

      13. Games of incomplete information - Bayesian Nash equilibrium (BNE):

        • Introduction to games of incomplete information and BNE. Link.

        • Application: Beliefs on types in the Market for Automobiles. Link.

      14. Applications of BNE to games with continuous actions:

        • Cournot competition under incomplete information. Link.

        • Auction Theory. Paper and Slides.

      15. More applications of BNE - Information Aggregation among several players. Link.

      16. From Bayesian Nash Equilibrium (BNE) to Perfect Bayesian Equilibrium (PBE). Link, and Handout.

      17. A systematic procedure for finding all pure-strategy PBEs: Paper and slides.

      18. Applications of PBE:

        • Labor market signaling game. Link.

        • Monetary authority signaling game. Link.

        • Application: Cold Openings in the Strategic Disclosure of Quality. Link.

      19. How to find Semi-separating PBEs (involving mixed strategies):

        • Introduction - Reputation in public good games. Link.

        • Poker game. Link.

        • Brinkmanship game. Link.

      20. Cheap Talk games (signaling with costless messages):

        • Cheap Talk with two types of privately informed player. Link.

        • Cheap Talk with three types of privately informed player. Link.

          • Application: Talk is not cheap in a court of law. Link.

      21. Signaling games in which both players (sender and receiver) are privately informed about their own type. Link.

      22. Equilibrium refinement criteria (the "Intuitive Criterion" and the "Divinity Criterion"). Link.

        • You can find more details about the application of these two refinement criteria, including worked-out examples, in this Paper and slides.

    4. Weekly Review sessions (Practice exercises with answers):

      1. Review session #1 - Representation of games and strategies.

      2. Review session #2 - Dominated strategies and Nash equilibrium. (Extra exercises)

      3. Review session #3 - Nash equilibrium in games with continuous action spaces.

      4. Review session #4 - Mixed strategy Nash equilibrium.

      5. Review session #5 - Backward induction and subgame perfection.

      6. Review session #6 - Bargaining games and Repeated games I

      7. Review session #7 - Repeated games II

      8. Review session #8 - Games with incomplete information I

      9. Review session #9 - Games with incomplete information II and Auction Theory

      10. Review session #10 - Signaling games I

      11. Review session #11 - Signaling games II

      12. Review session #12 - Signaling games III

      13. You can find more exercises (with answers) in my book: Strategy and Game Theory, Practice Exercises with Answers. Here.

    5. Homework assignments:

      1. Homework #1 - Answer key

      2. Homework #2 - Answer key

      3. Homework #3 - Answer key

      4. Homework #4 - Answer key

      5. Homework #5 - Answer key

      6. Homework #6 - Answer key

      7. Homework #7 - Answer key

      8. Homework #8 - Answer key

    6. Quizzes:

      1. Quiz #1 (Repeated games and collusion). Answer key.

      2. Quiz #2 (Games of incomplete information, BNE). Answer key.

      3. Quiz #3 (Signaling games and PBE). Answer key.

      4. Quiz #4 (Cheap talk games). Answer key.

      5. Quiz #5 (Signaling with three types). Answer key.

      For more class materials go to http://lms.wsu.edu/default.asp



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