Syllabus
EN
IT
We will follow Bonanno, G. (2024). Game theory (3rd ed.). Kindle Direct Publishing. The text is freely available online. The teacher will distribute further notes.
The text is complemented by a series of videos available on the author’s website, which students may watch for further study.
As an alternative textbook, students may consult Osborne, M. J. (2004). An introduction to game theory. Oxford University Press.
Evaluation is based on a written exam. To pass, students must demonstrate a basic understanding of the course’s fundamental concepts. Higher grades are awarded to students who can actively work with these concepts by presenting clear arguments and solving exercises. The highest grades are reserved for students who show deep understanding and strong independent judgment.
In-class lectures.
Learning Objectives
LEARNING OUTCOMES: The course aims to provide students with the basic tools to solve strategic interaction problems. During the first part of the course the basic concepts of game theory are introduced, defining the dominant or dominated strategy, the Nash equilibrium (NE), in coordination games and in the prisoner's dilemma. We define the Nash equilibrium in mixed strategies. In sequential games, we introduce credible and non-credible threats, and we define the Subgame Perfect Nash equilibrium (SPNE).
Behavioral game theory refers to how individuals choose over what the theory predicts. We will introduce social preferences by referring to the dictator game, the ultimatum game, the trust game, the public good game. We introduce the psychological and moral costs, in particular we refer to the role of communication and the social identity within game theory with psychological and moral costs. Experimental games will be carried out through experimental laboratory.
KNOWLEDGE AND UNDERSTANDING: The course aims to provide the student with both the theoretical and methodological tools through which he can have an organic framework of basic knowledge useful for understanding the strategic interaction in cooperative and non-cooperative games, simultaneous and sequential games.
APPLYING KNOWLEDGE AND UNDERSTANDING: Students will participate in several experimental games where they will make strategic decisions. We will show how to prepare an experimental design, how to test hypotheses and how to analyze data extrapolated from experiments in lab.
MAKING JUDGEMENTS:
At the end of the course, the student will be able to have the critical analysis tools necessary to interpret and face the main problems relating to interactive or strategic relationships with autonomy of judgment.
COMMUNICATION SKILLS: The student will acquire the ability to communicate, expressing himself with economic-technical language properties, his own knowledge acquired in the context of the topics covered during the course.
LEARNING SKILLS: At the end of the course, the student will have the conceptual tools and knowledge necessary to continue their studies, also critically analyzing the motivations underlying the choices in the contexts of strategic interaction.
Behavioral game theory refers to how individuals choose over what the theory predicts. We will introduce social preferences by referring to the dictator game, the ultimatum game, the trust game, the public good game. We introduce the psychological and moral costs, in particular we refer to the role of communication and the social identity within game theory with psychological and moral costs. Experimental games will be carried out through experimental laboratory.
KNOWLEDGE AND UNDERSTANDING: The course aims to provide the student with both the theoretical and methodological tools through which he can have an organic framework of basic knowledge useful for understanding the strategic interaction in cooperative and non-cooperative games, simultaneous and sequential games.
APPLYING KNOWLEDGE AND UNDERSTANDING: Students will participate in several experimental games where they will make strategic decisions. We will show how to prepare an experimental design, how to test hypotheses and how to analyze data extrapolated from experiments in lab.
MAKING JUDGEMENTS:
At the end of the course, the student will be able to have the critical analysis tools necessary to interpret and face the main problems relating to interactive or strategic relationships with autonomy of judgment.
COMMUNICATION SKILLS: The student will acquire the ability to communicate, expressing himself with economic-technical language properties, his own knowledge acquired in the context of the topics covered during the course.
LEARNING SKILLS: At the end of the course, the student will have the conceptual tools and knowledge necessary to continue their studies, also critically analyzing the motivations underlying the choices in the contexts of strategic interaction.
Prerequisites
Familiarity with basic mathematics: sets, functions, probability, elementary algebra. Knowledge of microeconomics helps. These prerequisites are the same for attending and non-attending students.
Program
• Expected utility: assumptions; the functional form; attitudes to risk.
• Static games: game frames; weak and strict dominance; mixed strategies; Nash equilibrium.
• Dynamic games: game trees; behavioral strategies; backward induction; subgame perfect equilibrium.
• Examples and applications: second price auctions; the pivotal mechanism; Cournout competition; ultimatum and trust game.
• Static games: game frames; weak and strict dominance; mixed strategies; Nash equilibrium.
• Dynamic games: game trees; behavioral strategies; backward induction; subgame perfect equilibrium.
• Examples and applications: second price auctions; the pivotal mechanism; Cournout competition; ultimatum and trust game.
Books
We will follow Bonanno, G. (2024). Game theory (3rd ed.). Kindle Direct Publishing. The text is freely available online. The teacher will distribute further notes.
The text is complemented by a series of videos available on the author’s website, which students may watch for further study.
As an alternative textbook, students may consult Osborne, M. J. (2004). An introduction to game theory. Oxford University Press.
Bibliography
Bonanno, G. (2024). Game theory (3rd ed.). Kindle Direct Publishing
Osborne, M. J. (2004). An introduction to game theory. Oxford University Press.
Osborne, M. J. (2004). An introduction to game theory. Oxford University Press.
Teaching methods
Lectures, problem-solving sessions, and lab sessions. Active student participation is strongly required.
Exam Rules
Evaluation is based on a written exam. To pass, students must demonstrate a basic understanding of the course’s fundamental concepts. Higher grades are awarded to students who can actively work with these concepts by presenting clear arguments and solving exercises. The highest grades are reserved for students who show deep understanding and strong independent judgment.
Attendance Rules
In-class lectures.