Introduction to Game Theory (2009)

Course Description



Introductory course on game theory delivered by John Fountain at the University of Canterbury, New Zealand, Econ 223 is a multi-disciplinarycourse at the University of Canterbury. Although the course is taught in the Economics Department , no economics prerequisites are necessary. Basically anyone who has completed first year at UC can do this course. Moreover, any student who is serious about a well rounded intellectual education in Arts, Science, Law, Commerce, Engineering, Forestry, or Education should consider doing this course. It'll be points in yourdegree that will be well spent.

Game theory is the science that studies strategic interaction. Strategic interaction is all about the interplay of competition and cooperation between rational, intelligent agents. Everyone acts strategically, whether the "game" involves high flying international business and politics or down home, nitty-gritty "games" in families, flatting arrangements, schools, sporting contests , the workplace, or in an ecological niche. But few learn the principles of good strategic interaction. This course is designed to help you do just that. You'll learn:

  • how to sensibly think through the strategic moves of other players in order to predict the likely outcomes of the many competitive and cooperative games you play in your life, and so avoid simple errors of strategic reasoning
  • when to expect cooperative behaviour from others -and when not to; as well as how to "change" games to facilitate cooperation when cooperation is good (eg getting rid of pollution) and inhibit cooperation when it is bad (eg preventing monopolistic exploitation)
  • when to randomize actions to keep your opponents guessing, and how to do it in ways that your opponents can't see through (playing tennis or dealing with random audits of the IRD)
  • when to seek out methods of coordination that will lead to desirable, or at least not undesirable, "solutions" to games where failures of coordination can be very costly, if not deadly;
  • how to credibly make commitments (promises or threats) that will facilitate good outcomes for you, and possibly others, and how to see through self serving promises and threats of others that lack credibility
  • how to use brinkmanship , the gradual escalation of risk in a strategic situation, to your advantage...and how to counter brinkmanship by others
  • how imperfect signals (like education qualifications or warranties) can be used to provide or conceal useful information about your competitors or fellow cooperators, when you might not fully trust their self reported information : ie when actions speak louder than words
  • how to think about bargaining, bidding, and voting...strategically

This course will provide you with insights into strategic interaction from three perspectives:

  • as a player trying to do the best for yourself,
  • as a researcher trying to understand and predict the outcomes of strategic interaction, and
  • as a strategic planner/engineer trying to tinker with complex situations of strategic interaction to "improve" outcomes for participating agents.

It runs from Feb 23 to June 5, 2 hours a week, and uses Dixit and Skeath's Games if Strategy as a text . Resources for the course, lecture by lecture, can be found at on the course website.

2009 final Exam answered

Econ 223 Brief Outline 2011:

Introduction to Game Theory (2009)
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