Game Theory: Advanced Applications

(4 Credits)

This is an undergraduate level course in game theory, with a particular focus on the role of incomplete information in strategic interactions. Decision makers, for example, buyers and sellers, are typically differentially informed about the quality, quantity or value of the traded goods. Their decisions depend both on their conjectures of the other participants' strategies as well as their best available information about the value of their outcomes. This course introduces the mathematical models of simultaneous optimization from game theory which are used to understand interactive decision making. It covers the well-known stylistic models of informational asymmetries. Then, we discuss applications in biology, computer science, engineering and finance. The course utilizes a combination of formal approaches (theorems, proofs, problem solving) and discussions of recent journal articles. Topics include: Models of Information in Strategic Interactions, Moral Hazard, Adverse Selection, Bargaining, Oligopoly, Trade, Auctions, Cheap Talk, Persuasion and Information Design, Information in Mechanism Design, Applications in Biology, Potential Games in Engineering, Algorithmic Game Theory.