School Of BusinessAdvanced Topics in Game TheoryWestern Sydney University Unit Code: 200491.2
Discipline: ECONOMICS
Student Contribution Band: 3
Level: 5
Credit Points: 10
About this Unit
This unit aims at providing the necessary tools for modelling strategic interaction among economic agents. Game theory is needed whenever interations involve a limited number of economic agents whose decisions directly affect each others' well-being. The spreading of Game theoretic modelling to most of the economic fields makes essential a good understanding of the concepts underlying its tools. Moreover, Game Theory, as it is now, cannot be dissociated from another exploding field, namely Experimental Economics. This discipline aims at refuting hypothesis used in Game theory in a controlled environment, experimenting typical games and their underlying assumptions with students. This new tool of refutation at the economist's disposal has become more and more popular since the first experiments conducted in the 1980's, notably by Werner Guth (1982). Currently, Experimental Economics is evolving toward adding more contextual elements into the experiment, bankers and clients' relations, firms' price policy, market structure, bilateral negotiations, workplace relations and so on. Providing a course in Game theory and orientating it toward applications through Experimental Economics would enrich and differentiate the Honours program offered by UWS. The first set of lectures will aim at providing the students with the basics of thinking strategically and with the fundamental concepts, such as strategies, games' institutions and Nash equilibrium, etc. The next set of lectures will progressively evolve towards more sophisticated models, more realistic for modelling actual economic situations. At this stage we will enter into the distinction between cooperative and non-cooperative games, introduce the dynamic aspects of certain relationships (repeated, sequential, etc.), introduce information asymmetries among players and analyse the consequences in terms of optimal strategies of such refinements of the basic models. We aim at designing this new subject in such a way that by the end of the semester, the students will be able to use game theoretic tools anywhere they would be required to do so, either academically or in their future workplace. For this purpose, this new subject will be complemented with many examples and we shall recourse a lot to experimental results.