In many – perhaps most – economic interactions, there is potential for strategic behaviour, a term, “intended to focus on the interdependence of the adversaries’ decisions and on their expectations about each other’s behaviour.” (Schelling, 1960, The Strategy of Conflict).   Recognising and understanding such behaviour is an essential part of any economist's toolkit and this course is designed to enable just such recognition and understanding. Game theory has successfully been applied in a diverse range of fields, such as economics, political science, law, biology and computer science.

The aim of this course is to provide an introduction to strategic thinking and analysis through the basic techniques of game theory and to illustrate the range of its applications in economics and business and other areas.  While the level of the course will be introductory, and mathematical prerequisites are minimal, the presentation of the material will rely on precise logical arguments.

On satisfying the requirements for this course, students should have the knowledge and skills to:
• Understand how game theorists think and approach a strategic problem.
• Understand the tools taught in class and be able to recognise their application to the analysis of real world fact situations.
• Recognise the strategic issues in a problem and understand how a game theorist might decide on the appropriate tools to analyse it.

Assessment is on the basis of a number of Problem Sets, a midterm examination, a final examination and in-class quizzes. The problem sets involve a mixture of analytical numerical questions and brief written answers.  The exams may also include a range of question types: short answers, definitional questions, analytical problems and essays.

 12 hours per week

Prior acquaintance with economic modeling is helpful, but is not a requirement for the course.

ECON1101 Microeconomics 1, and EMET1001 Foundations of Economic and Financial Models or prior study of university mathematics to an appropriate level.

Please refer to Course Website