Introductory Game Theory
Winter Term, 2012


Welcome to the Economics 171  Website. Here you will find the course syllabus, a schedule of lessons, homework and examinations, and some bits of advice. Students in this class  will be expected to check this site regularly.  I  will routinely use this site for posting announcements and homework assignments.
 

 

Instructor:          Ted Bergstrom 

Office:  North Hall 2052 

Office Hours:   Wednesday, 2-3:25

Email: tedb@econ.ucsb.edu

Announcements:

            Be sure to register your i>clicker and bring it to class next time we meet.  To register, go online to www.iclicker.com and click the Register Your i>clicker button.
For those who haven't yet got your textbooks, I have made and posted pdf copies of Harrington's Chapter 2  at this link    and Chapter 3 at this link. I am not allowed to make any more chapters than this, so you will have to either get a text or make arrangement to borrow somebody's copy to go beyond Chapter 3.

Lecture Notes:I will occasionally post PowerPoint slides form the lectures.  These are far from complete,
because we also use the blackboard and oral discussion.   They do not serve as a substitute for
reading the textbook.

                           Introduction
                           Extensive Form Games
                           Dominance
                           Nash Equilibrium
                           N-Player Games
                           Subgames
                           Subgames and imperfect information
                           Bayes Nash Equilibrium
                           Auctions
                           Signaling
                          Cheap Talk
                          Infinitely Repeated Games
                          Punishment and Forgiveness
                          Evolutionary Games
                          Two-population evolutionary games

Oilfield Experiment Instructions
Auction Record Sheets
There was not much evidence of Winners' Curse in our classroom experiment.
Of the 14 auction winners, 3 lost money,  4 broke even and 7 made profits.
The average profit of auction winners was about $300,000.

Exam Answers

Discussion of Answers to Midterm 1 

Answers to Midterm 2

Copy of Final Exam

Discussion of Final Exam Answers


Course Introduction

Game theory is the study of the interaction of rational decision makers.  This theory has become a fundamental tool in the study of social interaction in economics, political science, anthropology, sociology,  animal behavior, biology, computer science and other disciplines.  In this course we introduce basic concepts of game theory and explore a variety of applications.

The main study resource for this course is the textbook is Games, Strategies, and Decision Making  by Joseph E. Harrington, Jr.   For those who haven't yet got your copies of the text, I have made and posted pdf copies of Harrington's Chapter 2  at this link    and Chapter 3 at this link.

Is this the course for you?

If you are looking for an easy course and generous grades for  low performance, this is not the course for you.  There is regular assigned reading and  homework and frequent  unannounced in-class quizzes.  You will be expected to come to class and to have done the assigned reading before you come to class.  I will use clickers to record attendance  and will call on people regularly.  I do not hesitate to give failing grades to those who show no evidence of having learned the course material.

You will be required to bring an  i>clicker to class.  If you don't already have one, they are available for purchase at the campus bookstore.   If you haven't already done so, you will need to register your i>clicker at the following website.  www.i>clicker.com/registration.
 
If you are intellectually curious and  are willing and able to put in the effort to read the assigned material,  work the assigned homework problems, and show up in class having done your assignments, I think that you will find the course stimulating and enjoyable.  

 


Basis for grades

The weights that I will assign in determining your course grade are as follows. 
I will drop everyone's lowest homework score when calculating course grades.

Homework, in-class quizzes, and clicker scores, 20%
Midterm 1:  25%
Midterm 2: 25%
Final Exam: 30%.

Schedule of Assignments

You will be expected to do the assigned readings BEFORE you come to class.
There will be frequent unannounced quizzes on the reading material.  Some of the
quizzes will be brief written answers to a question about your readings.  Some will
use the clickers.

Our schedule, like the weather report, will  become more detailed and more accurate
as the scheduled week approaches.

Week 1
 

January 10 and 12
Readings: Harrington: Chapters 1 and 2.
A pdf copy of Chapter 2 can be found at this link. 
As you read, do the "Check Your Understanding Exercises."   Answers to these are found in the back of the book.  You do not need to turn these in, but you should do them.
Homework: Due January 12:  problems 2 and 3 pp 49-50


Week 2

Readings:
  Tuesday, Jan 17   Harrington  Chapter 3,
Thursday, Jan 19,   Harrington Chapter 4, pp 89-100
  A pdf copy of Chapter 3 can be found at this link.
Homework:
due  Tuesday Jan 17: problems Chap 2-- 5, 6, and 8 and 11 pp 50-53,
due Thursday Jan 19 problems Chap 3--1, 4, 5, and 8 pp 79 -81
                                                                                                                                                                                                                                                            

Week 3

Readings:
Jan 24 Harrington:  Finish Chapter 4, Read Chapter 5.
 Homework:
due Tuesday, Jan 24:  Chap 3, Problems  9 and 10 pp 82-83, Chap 4, problems 1 and 2  and the problem at this link.
For Thursday, Jan 26, I will not ask you to hand in homework, but I recommend that for your own benefit, you  work as many  of the remaining problems in
Chapters 4 and 5 as you can.

Week 4

First Midterm,  Jan 31.  Exam covers Chapters 1-5.

Readings: Feb 2, Harrington Chapter 7, sections 7.1-7.2
Before coming to class on Feb 2,  also read The Purloined Letter by Edgar Allan Poe.  A copy is available at this link.  (Be able to describe the game played by  the eight-year-old marble player.  What do you think of his strategy?)

Week 5: 

Readings: Feb 7,  Finish Chapter 7, Read Chapter 8, sections 8.1-8.3
  Feb 9, Finish Chapter 8.
Homework:  
Due Feb 7 Problems 1, 4, 5, 8, and 11 pp 212-214.
Due Feb 9 Problems 1, 3,   4 , and 5 pp 244-253

 Week 6:  Readings:   Feb 14, Read Chapter 9.
Due Feb 14   Problem 8 page 251 and Problems 1, 3, and 4 pp 281-284
Feb 16,  Read Chapter 10 sections 10.1-10.3
 
Week 7:  Readings:
Feb 21 Finish reading Chapter 10, Read Chapter 11 pp 325-333
Feb 23 Finish Chapter 11
Homework due Feb 21. Do the two problems at this link and also Problem 3 on page 314.
A solution for the Alice-Bob homework problem.
A Note on the Wyatt Earp problem from your text.

Week 8:
Second Midterm,  Tuesday, February 28
Thursday, March 1, Read Chapter 12

Week 9:
Tuesday, March 6,  Read Chapter 13
Homework Due March 6:  Problem 1, page 382 and these three problems from midterm
Thursday, March 8, Read Chapter 14
Homework Due March 8:  Problem 1, page 411 and Problem 7, page 414
 

Week 10:
Tuesday, March 13, Read Chapter 16
Homework due Tuesday:
Chapter 16, Problems 2, 3, and 4.
And as a finale for  turned in homework assignments--Try Problem 6 for extra credit.
Thursday, March 15, Read Chapter 17
No homework to be turned in on Thursday.