GAME THEORY

This optional course provides the basics of formal strategic reasoning, giving an introduction to game theory. The ability to represent and reason about strategic interaction is fundamental in supporting decision-making in any environment that involves elements of competition or cooperation.

The course is geared to ambitious students who are not afraid of analytical thinking. Due to the cuts in teaching enacted by the Academic Senate (1 ECTS=3.75 actual hours of frontal instruction), this 6-ECTS course covers less than what is customarily expected in similar courses taught across the European Union.

a) Knowledge and understanding:
a.1) Ability to discern strategic interactions.
a.2) Ability to recognise dominant and dominated strategies.
a.3) Ability to conceptualize randomisation in strategic play.

b) Applying knowledge and understanding:
b.1) Ability to compute different kinds of equilibria.
b.2) Ability to build formal models for reasoning about simple strategic interactions.
b.3) Ability to handle basic notions of randomisation in strategic play.

c) Making judgements
c.1) Ability to detect and discuss trade-offs in strategic choices.
c.2) Ability to rank the plausibility of different predictions about strategic interactions.

This course emphasizes applications over theory. The formal prerequisite is successful completion of the first-year course in Mathematics. Successful completion of the course in Risk and Uncertainty (or equivalent) is highly recommended.

1. Strategic interactions
2. Games in strategic form
3. Uncertainty and mixed strategies
4. Games in extensive form
5. Solution concepts
6. Economic applications
7. Bargaining
8. Repeated games

J. Watson (2013), Strategy: An Introduction to Game Theory, third edition, Norton.

R. Gibbons (1992) Game Theory for Applied Economists, Princeton University Press.

R. Gibbons (1992) A Primer in Game Theory, Harvester Wheatsheaf.

The latter two books are the same book (just the US and the European editions).

Grading is based on a final written exam. This consists of two or three problems, each with its own score.
There will also be the possibility of taking two midterms instead of the final exam.

If the number of active students is not greater than 20, there may be problem sets assigned as homework, whose outcomes will contribute 10% of the final grade for those who take their exam in the first call.

The exam is closed-notes and closed-book, but you are allowed to use a pocket calculator and two sides of an A4-sheet prepared by you at home. Failing to register for the exam is sufficient cause for denying admission.
Regarding the grading scale:
A. Scores in the range of 18-22 will be awarded for:
- sufficient knowledge and applied understanding of the program;
- sufficient ability to solve the proposed problems;
- limited ability to explain the mathematical procedures underlying the solution of the proposed exercises.

B. Scores in the range of 23-26 will be awarded for:
- fair knowledge and applied understanding of the program;
- fair ability to solve the proposed problems;
- fair ability to explain the mathematical procedures underlying the solution of the proposed exercises.

C. Scores in the range of 27-30 will be awarded for:
- good or excellent knowledge and applied understanding of the program;
- good or excellent ability to solve the proposed problems;
- good or excellent ability to explain the mathematical procedures underlying the solution of the proposed exercises.
D. Honors will be awarded for:
- excellent knowledge and applied understanding of the program, and an outstanding ability to present and explain the solution of the exercises.

Lectures with practice sessions.

English

For information and updates, see the class Moodle page.

Ca’ Foscari abides by Italian Law (Law 17/1999; Law 170/2010) regarding support services and accommodation available to students with disabilities. This includes students with mobility, visual, hearing and other disabilities (Law 17/1999), and specific learning impairments (Law 170/2010). If you have a disability or impairment that requires accommodations (i.e., alternate testing, readers, note takers or interpreters) please contact the Disability and Accessibility Offices in Student Services: disabilita@unive.it.

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