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Syllabus

EN IT

Learning Objectives

LEARNING OUTCOMES: Introduction to strategic reasoning.

KNOWLEDGE AND UNDERSTANDING: Make students familiar with strategic reasoning when modeling social interactions.

APPLYING KNOWLEDGE AND UNDERSTANDING: Make students able to stress the strategic aspects of monopolistic and oligopolistic contexts in the presence of asymmetric information.

MAKING JUDGEMENTS: Make students aware of the common logic underlying different approaches to social interactions.

COMMUNICATION SKILLS: Make students able to formalize their intuitions and to communicate them to non-specialists.

LEARNING SKILLS: Improve the students’ problem-solving skills.


Prerequisites

Basic knowledge of neoclassical consumer theory, production theory under certainty and
uncertainty. Notions of convexity of sets and of functions.

Program

Static games of complete information: main solution concepts. Existence theorem for
a Nash equilibrium. Applications: models of imperfect competition. Dynamic games of
complete information. Representation through extensive form and backward induction.
Subgame perfection. Introduction to repeated games. Applications: bargaining models,
repeated oligopoly. Games of incomplete information and Bayesian equilibria. Applications:
first and second-price auctions, revenue equivalence. Dynamic games with incomplete
information and perfect Bayesian equilibria. Applications: A model of screening
in the labor market, reputational bargaining, political reputation and diplomatic
brinkmanship.

Books

R. Gibbons “A Primer in Game Theory”, 1992, Pearson Education Limited.

Mas Colell, A., Whinston M., and J Green “Microeconomic Theory” , 1995, Oxford University
Press.

M. J. Osborne "An Introduction to Game Theory", 2004, Oxford University Press.

Bibliography

R. Gibbons “A Primer in Game Theory”, 1992, Pearson Education Limited.

Mas Colell, A., Whinston M., and J Green “Microeconomic Theory” , 1995, Oxford University
Press.

M. J. Osborne "An Introduction to Game Theory", 2004, Oxford University Press.

Teaching methods

Frontal lectures and practices. Class discussions.

Exam Rules

Ongoing evaluation by means of problem sets (30% of the final grade) to be handed
in during the course. The individual solutions to the assigned problem set will be graded and the exercises/questions will be then corrected in class. Written final exam (70% of the final grade), to evaluate the ability to develop a logical and coherent mathematical reasoning.
Active participation during class lectures and open discussions will also be a part of the
evaluation. The lecturer can propose to orally discuss advanced topics.