STRATEGY AND INFORMATION
Syllabus
EN
IT
Learning Objectives
LEARNING OUTCOMES: Introduction to strategic reasoning when information is imperfect.
KNOWLEDGE AND UNDERSTANDING: Make students familiar with strategic reasoning
when modeling corporate decision making, market regulation and other social environments
APPLYING KNOWLEDGE AND UNDERSTANDING: Learn tools for analyzing economic interactions that are strategic and not perfectly competitive such as oligopolistic competition and with a special focus on interactions where economic agents hold asymmetric information.
MAKING JUDGEMENTS: Equip students with a toolkit that can be applied among other things to strategic analysis of different business environments, different competition marketing or investment strategies, or whether and how a particular market should be regulated.
COMMUNICATION SKILLS: Make students able to formalize their intuitions and to
communicate them to non-specialists.
LEARNING SKILLS: Improve the students’ problem-solving skills.
KNOWLEDGE AND UNDERSTANDING: Make students familiar with strategic reasoning
when modeling corporate decision making, market regulation and other social environments
APPLYING KNOWLEDGE AND UNDERSTANDING: Learn tools for analyzing economic interactions that are strategic and not perfectly competitive such as oligopolistic competition and with a special focus on interactions where economic agents hold asymmetric information.
MAKING JUDGEMENTS: Equip students with a toolkit that can be applied among other things to strategic analysis of different business environments, different competition marketing or investment strategies, or whether and how a particular market should be regulated.
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. (9 lecture hours)
Dynamic games of complete information. Representation through extensive form and backward induction. Subgame perfection. Introduction to repeated games. Applications: bargaining models, repeated oligopoly, tacit collusion. (9 lecture hours)
Games of incomplete information and Bayesian equilibria. Applications: first and second-price auctions, revenue equivalence, oligopolistic competition with incomplete information. (9 lecture hours)
Dynamic games with incomplete information and perfect Bayesian equilibria. Applications: A model of screening in the labor market, reputational bargaining, entry barriers and other dynamic anti-competitive strategies. (9 lecture hours)
Dynamic games of complete information. Representation through extensive form and backward induction. Subgame perfection. Introduction to repeated games. Applications: bargaining models, repeated oligopoly, tacit collusion. (9 lecture hours)
Games of incomplete information and Bayesian equilibria. Applications: first and second-price auctions, revenue equivalence, oligopolistic competition with incomplete information. (9 lecture hours)
Dynamic games with incomplete information and perfect Bayesian equilibria. Applications: A model of screening in the labor market, reputational bargaining, entry barriers and other dynamic anti-competitive strategies. (9 lecture hours)
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.
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.
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
The assessment method is entirely based on a written exam. The exam is composed of two or three exercises, possibly including theoretical questions. It requires students to be able to solve similar games to the ones covered in the module. The grade for the exam is expressed out of thirty points. Students can supplement a maximum of 15% of their exam score by solving weekly problem sets.
The grading is as follows:
Fail: major deficiencies and/or inaccuracies in knowledge and understanding of topics; limited ability to analyze, apply and synthesize.
o 18-20: Barely sufficient knowledge and understanding of topics with possible imperfections; basic understanding of models of competition with limited ability to solve applied problems.
o 21-23: Routine knowledge and understanding of topics; Correct analysis and synthesis skills with coherent logical argumentation and some ability to solve applied problems.
o 24-26: Fair knowledge and understanding of topics; Good analytical and synthesis skills with rigorously expressed arguments and good ability to make connections and apply the course material.
o 27-29: Comprehensive knowledge and understanding of topics; Remarkable skills of analysis, synthesis. Very good ability to independently make connections and apply learnt material.
o 30-30L: Excellent level of knowledge and understanding of topics. Remarkable analytical and synthesis skills and independent ability to apply and make connections within the course material. Arguments expressed in an original way.
The grading is as follows:
Fail: major deficiencies and/or inaccuracies in knowledge and understanding of topics; limited ability to analyze, apply and synthesize.
o 18-20: Barely sufficient knowledge and understanding of topics with possible imperfections; basic understanding of models of competition with limited ability to solve applied problems.
o 21-23: Routine knowledge and understanding of topics; Correct analysis and synthesis skills with coherent logical argumentation and some ability to solve applied problems.
o 24-26: Fair knowledge and understanding of topics; Good analytical and synthesis skills with rigorously expressed arguments and good ability to make connections and apply the course material.
o 27-29: Comprehensive knowledge and understanding of topics; Remarkable skills of analysis, synthesis. Very good ability to independently make connections and apply learnt material.
o 30-30L: Excellent level of knowledge and understanding of topics. Remarkable analytical and synthesis skills and independent ability to apply and make connections within the course material. Arguments expressed in an original way.