I Term September - December

• Game Theory (Prof. Marco Pagnozzi)

Static games with complete information. Simultaneous moves games. Games in strategic form, dominant strategy equilibrium, iterated deletion of strictly dominated strategies. Reaction functions and Nash equilibrium. Finding Nash equilibria with both discrete and continuous action spaces. Supermodular and submodular games. Mixed strategies, domination by a mixed strategy and never-best-response. Rationalisability. Imperfect Information and incomplete information. Risk dominance.

Dynamic games with complete information. Games in extensive forms. Backward induction and information sets, Subgame perfect Nash equilibrium. Repeated games. Folk theorems. Collusion.

Games with incomplete information. Bayesian Nash Equilibrium. Purification. Forward induction. Sequential rationality, consistency of beliefs and perfect Bayesian Nash Equilibrium. Signalling: separating equilibria and pooling equilibria. Spence Signalling Model. Cho and Kreps criterion.

  Bibliography:

• Robert Gibbons, "A Primer in Game Theory", Harvester-Wheatsheaf, 1992
• Martin Osborne, "An introduction to Game Theory", Oxford University Press, 2003
• Andreu Mas-Colell, Michael Whinston e Jerry R. Green, "Microeconomic Theory", Oxford University Press, 1995.