EC3302 (Provisional may change)
Decision and Game Theory
LECTURER:
Dr Manfredi La Manna
Martinmas (First) Semester 2015/16
CREDITS: 20
LECTURES
20 lectures + 2 class tests.
2 x 1 hour lectures per week.
Timing of lectures and venue: TBA
TUTORIALS: 5 x 1 hour tutorials likely in weeks 3,
4, 6, 8 and 9. (To be confirmed).
EXAMINATION: [6]
A two-hour examination
(To be confirmed).
CONTINUOUS ASSESSMENT:
1 x 50 minute class test, date TBA.
1 x 50 minute class test, date TBA.
FINAL GRADE: [8]
Examination 50% weight
Class Test 25% weight
Class Test 25% weight
ATTENDANCE REQUIREMENTS: you must sit
the examination and attend a minimum of 4
tutorials to gain credit for this class.
Brief module outline
Decision and Game Theory focuses on the decisions of economic agents and their behaviour in
interactive situations. This course will teach the basics of strategic thinking, aiming to guide
students’ understanding of the common roots of many social and economic dilemmas.
Beginning with the discussion of simple games, analytic tools will be introduced progressively
leading the discussion of numerous applications like auctions, bargaining, oligopoly, financing
decisions, voting, and many more.
Learning outcomes
By the end of the course, students will





be able to understand and to assess critically the strengths and limitations of key games
extensively used in both micro- and macro-economics;
be able to understand basic game-theoretic concepts can be used to analyse a wide
variety of economic issues and problems.
develop a way of thinking and acquire the skills necessary to identify the game-theoretic
implications of decision-making both in economic modelling and in real-life settings.
be able to extend the game-theoretical approach to decision-making to non-economic
fields such as management, politics, international relations, biology.
Have an improved ‘transferable skills’ set. Please see (a link here) for a further
discussion of these skills.
Course outline
1.
2.
3.
4.
5.
6.
Rationality and Choice
Bayesian Thinking
Expected Utility and Risk Aversion
Prisoner Dilemmas, Cooperation and Conflict
Games in Normal Form, Domination, Best Responses, Nash Equilibrium
Sequential moves and backward induction
7. Repeated games
8. Information and Communication.
Reading
Pre-sessional reading: the flavour of the main themes explored in DGT can be tasted by
reading Ken Binmore’s entertaining Game Theory. A very short introduction. 2007 OUP.
Another useful introduction, with emphasis on decision-making for managers (but do not be put
off – this is not a management textbook!) is Anthony Kelly’s Decision Making using Game
Theory, 2003 CUP.
S.O. Hanson’s Decision Theory. A brief introduction (http://people.kth.se/~soh/
decisiontheory.pdf) does what it says on the tin: 80-page survey of decision theory topics.
Required textbook for DGT (supplemented by lecture notes and selected articles/chapters) is:
S. Tadelis, Game Theory. An Introduction, 2013 Princeton UP.
1