An Introduction to Game Theory

Course Description

An Introduction to Game Theory is a three-week core course in behavioral economics. Game theory is the systematic study of strategic interactions that are present everywhere, not only in economics but in politics, sociology, law, computer science, and sports.

The main goal of the course is to introduce students to the basic concepts and tools of game theory and to apply these tools to real-life situations. Students will learn the fundamentals of game theory starting with basic terms such as strategies, payoffs, and information, and then will progress from the analysis of simple to more complex games. These will include single-move games, games with multiple rounds, games played with complete knowledge and those where information is imperfect, and games with just two players to those with multiple players.

This course introduces decision-making theories and related laboratory experiments in economics. Students will learn why and how economists use controlled experiments to learn about economic behavior. Standard game theory asks how rational geniuses play games, but ignores how average people with emotions and limited foresight actually play games. We will learn how emotions like jealousy and honesty affect behavior and decision making.

At the end of the course, students will be able to think analytically and recognize strategic interactions in real-life scenarios. They will be able to analyze the situation, frame it in terms of the tools discussed, and understand the strategies used in the interaction.

Prerequisites: No prior knowledge of economics is necessary, but basic math knowledge is recommended.