Game Theory

by Prof. Dr. Dirk Engelmann

Game theory comprises the study of multi-person decision problems. It is a formal way of analyzing interaction among a group of rational agents who behave strategically. The first three lectures are designed to introduce the major concepts used in game theory. We first focus on static games of complete information and introduce some basic concepts such as iterated dominance and Nash equilibrium. We then analyze dynamic games of perfect and imperfect information and introduce backwards induction and sub-game perfect equilibrium. Finally, we introduce some problems that are particular to games of incomplete information and introduce solution concepts and their refinements. Throughout the course several examples will show how game theory can be used to understand economic, social, political and even biological phenomena.