Insights from game theory into social behavior

Lectures: 2 sessions / week, 1.5 hours / session

Math TA Session: 2 sessions / week, 2 hours / session

We will apply insights from game theory to explain human social behavior, focusing on novel applications which have heretofore been the realm of psychologists and philosophers—for example, why people speak indirectly, in what sense beauty is socially constructed, and where our moral intuitions come from—and eschewing traditional economic applications such as industrial organization or auctions.

We will employ standard games such as the prisoners dilemma, coordination, hawk-dove, and costly signaling, and use standard game theory tools such as Nash Equilibria, Subgame Perfection, and Perfect Bayesian Equilibria. These tools will be taught from scratch and no existing knowledge of game theory, economics, or mathematics is required. At the same time, students familiar with these games and tools will not find the course redundant because of the focus on non-orthodox applications.

In order to apply game theory to social applications, we will also introduce models of learning and evolution, employing mathematical techniques such as first order differential equations and Markov Chains, as well as simple computer simulations in MATLAB®. These, too, will be taught from scratch; no prior experience with differential equations or computer programming is required.

The class will cover readings from other fields, such as research papers on animal behavior, experiments in economics and psychology, popular culture books on evolutionary biology, and essays by philosophers. Again, no background in these areas are required.

We hope this class will stimulate students with a new perspective on age-old questions, expand their economics toolkit, broaden the range of questions to which students consider applying these tools, and generate dialogue that will deepen not only students' understanding of the world around them, but also our own.

14.01 Principles of Microeconomics

The suggested text for the course is:

Osborne, Martin, J. An Introduction to Game Theory. Oxford University Press India. ISBN: 9780198086109.

Advanced students may prefer Osborne's graduate text:

Osborne, Martin, J., and Ariel Rubinstein. A Course In Game Theory. MIT Press, 1994. ISBN: 9780262650403. [Preview with Google Books]

Additional readings can be found in the Readings section.

Your performance in this class will be evaluated based on homework assignments, a final project, and class participation. Your grade will be decided using the following weights:

Problem sets will be curved individually and weighted equally, and we will drop your lowest problem set score before calculating this portion of your grade. For the referee reports, you will be given credit for submitting a satisfactory report (pass/fail), and you may choose not to submit up to two reports. The final project and class participation grades will both be normalized and curved prior to being included in your grade. We expect most folks who complete the assignments and project to earn an A or a B in the class, and we'll provide you with ample warning and support if we think you are at risk of getting a lower grade.

You are expected to complete a final project. An outline is due two weeks prior to the due date.

For the final project, you may complete a simulation, literature review, an experimental design or analytic proof of your choice. We'll explain what we mean and provide a list of possible projects in a few weeks. You will be able to choose from one of the listed projects, or suggest your own. If you choose you may work on and hand in your project in groups of up to two students.

There will be two types of homework assignments: problem sets and referee reports. For each student, we will drop the lowest assignment from each type. You'll also have an opportunity to get extra credit by submitting examples. The problem sets will review the game theory tools we use in the class, and will look like problem sets in any other class. The referee reports will be 1–2 page reviews of the required or suggested readings, each one focusing on one paper of your choice. The "generating examples" assignments will be 1–2 paragraph descriptions of additional evidence for the theory from current events, movies, history, etc.

You may work on and hand in all assignments in groups of up to two students. We will not be accepting assignments late. If you have an emergency that prevents you from turning in an assignment on time, that assignment will be the one we drop.

Referee reports will be due the second class of each week. Problem sets will be due every other week.

Your class participation will be evaluated subjectively, based on our assessment of your familiarity with the required readings, and the quality of the insights you convey. Great comments made in office hours or during a TA session will count towards your grade, too!

After the first week, you will be expected to have read the readings in advance of class. Make sure to read any notes we provide on the topic, and also to at least skim the references. From time to time, we will also suggest chapters in Osborne. We recommend you at least skim these chapters prior to class.

If you need help outside of class, don't hesitate to ask us or the TAs. After class is a great time to follow up on anything you might not have fully grasped. We'll also be holding office hours after every class, where you can ask more detailed questions. The math TA will hold one bi-weekly review session, and office hours on the weeks when there is no session at the same time and location. The social behavior TAs will hold weekly office hours as well.

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