Games, Strategy and Information

Code:

2ECON02

Acronym:

TJI

Keywords
Classification	Keyword
CNAEF	Economics

Instance: 2021/2022 - 1S

Active?	Yes
Responsible unit:	Agrupamento Científico de Economia
Course/CS Responsible:	Master in Economics

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
ME	0	Bologna Syllabus	1	-	7,5	56	202,5

Teaching language

Portuguese and english

Objectives

The focus of economic science has evolved along the past decades. Among the new issues are asymmetric information, market design, the role of institutions, and social choice.
Aware of the challenges, the course has two dimensions. The first is instrumental, and offers a rigorous introduction to game theory. The goal is to supply students with the tools needed to analyze the new problems. The second dimension aims at applying these tools to issues like:
(1)    Strategic interaction and its impact on individual behavior.
(2)    Negotiation and decision-making.
(3)    Adverse selection and non-monetary incentives.
(4)    The details of each market and how to improve their efficiency.
(5)    The role of institutions and social choices.

Learning outcomes and competences

Students ought to master the above mentioned scientific goals, and be able to apply game theoretical tools to practical problems. Students will develop skills in the following areas:
(1)    Interpreting and processing economic information, as well as oral and written communication.
(2)    Critical thinking in the acquisition of new knowledge, and logical thinking in problem solving and decision-making.
(3)    Planning tasks and teamwork.
(4)    Ethics: students should incorporate ethical and professional principles into their behavior.
(5)    Developing students' strategic reasoning.
(6)    Improving students' critical thinking through the study of practical examples from industrial organization, finance, macroeconomics, labor economics, spatial economics, trade, education, marketing, politics, conflicts between nations, sociology, etc.

Working method

Presencial

Program

1. Static games of complete information and Nash equilibrium

1.1. Static games and Nash equilibrium

1.2. Applications: Cournot model, the tragedy of the commons

2. Dynamic games of complete information

2.1. Dynamic games of complete and perfect information

2.2. Applications: Stackelberg model, bargaining, and strategic moves

2.3. Dynamic games of complete and imperfect information

3. Static games of incomplete information

3.1. Incomplete and imperfect information

3.2. Bayes-Nash equilibrium

3.3. Applications: Auctions

3.4. Mechanism design

4. Dynamic games of incomplete information

4.1. Perfect Bayesian equilibrium

4.2. Applications: Signalling, Adverse Selection

5. Market equilibrium and market failure

5.1. Pareto optimality and competitive equilibria

5.2. Welfare analysis in the partial equilibrium model

5.3. Externalities and public goods

6. General equilibrium

6.1. Definition and basic model

6.2. Welfare analysis in the general equilibrium model

Mandatory literature

José Manuel Peres Jorge; Jogos, estratégia e informação. ISBN: 978-972-592-515-7
Robert D. Gibbons; A^primer in game theory. ISBN: 0-7450-1159-4 (Mandatory literature for English course, EST 573(1))
Hal R. Varian; Intermediate microeconomics. ISBN: 978-0-393-93533-2

Complementary Bibliography

Dixit, A. K. and B. J. Nalebuff; Thinking Strategically, Norton, 1993
John McMillan; Games, strategies and managers: how managers can use game theory to make better business decision, Oxford University Press, 1996. ISBN: 978-0-19-510603-3
McMillan, John; Reinventing the bazaar. ISBN: 978-0-393-32371-9
Dutta Prajit K.; Strategies and games : theory and practice, MIT Press, 1999. ISBN: 0-262-04169-3
Rasmusen, Eric; Games and information : an introduction to game theory, Oxford : Blackwell, 2002. ISBN: 0-631-21095-4

Teaching methods and learning activities

Theorethical and pratical classes. In addition to the development of theoretical models and resolution of exercises, there are also presented case studies and applications.

Evaluation Type

Distributed evaluation with final exam

Assessment Components

Designation	Weight (%)
Teste	50,00
Participação presencial	30,00
Trabalho escrito	20,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Estudo autónomo	125,50
Frequência das aulas	54,00
Trabalho escrito	23,00
Total:	202,50

Eligibility for exams

Not applicable.

Calculation formula of final grade

Distributed evaluation: The final classification corresponds to the weighted average of the marks obtained in: solving exercises in class (30%), individual essay (20%), and final test (50%).

The grade of the final exam, to be made in the recourse or special seasons, yields the final classification.

Special assessment (TE, DA, ...)

General assessment regime.

Classification improvement

General assessment regime.

Observations

Horários/schedules: Aula em Português; Class in English