ISCTE-IUL > Education > LE , LG

Game Theory and Economic Applications (2 º Sem 2017/2018)

Code:	L6054
Acronym:	TJE
Level:	1st Cycle
Basic:	No
Teaching Language(s):	English
Friendly languages:

Be English-friendly or any other language-friendly means that UC is taught in a language but can either of the following conditions:
1. There are support materials in English / other language;
2. There are exercises, tests and exams in English / other language;
3. There is a possibility to present written or oral work in English / other language.

Semester	ECTS Credits	Theoretical Lesson (T)	Theoretical and Pratical Lesson (TP)	Practical and laboratorial lesson (PL)	Seminary (S)	Field Work (TC)	Training Period (E)	Tutorial Orientation (OT)	Contact Hours	Autonomous Work	Others (O)	Total Load Hours [?]Contact Hours + Autonomous Work
1	6.0	0.0 h/sem	36.0 h/sem	0.0 h/sem	0.0 h/sem	0.0 h/sem	0.0 h/sem	1.0 h/sem	37.0 h/sem	113.0 h/sem	0.0 h/sem	150.0 h/sem


Since year	2017/2018
Pre-requisites	Mathematics I and II and Microeconomics I (recommended).
Objectives	The course introduces game theory and strategic thinking providing the students useful tools to support decision-making in economic and business situation of strategic interaction. We focus on the main concepts and models of noncooperative games, constantly providing economic applications. The course is recommended to those who want to: - acquire strategic decision-making skills and tools to enter the labour market in the short-run; - prepare to enrol graduate degrees and to master the basic notions of strategic behaviour to prepare for more advanced approaches. The course contributes to reach the following goals of the BSc in: - Economics: SGL41. Capacity to identify and replicate the main points of contemporary economic theories SGL52. To understand the strong points but also the limitations of the models and techniques used in Economics. - Management: SGL51. To understand the role of strategy and strategic management of companies.
Program	1.Introduction and basic concepts of game theory 2.Static games with complete information 2.1.Concepts: dominance, best response and Nash equilibrium 2.2. Applications: industrial organization, common goods, international trade, voting 2.3. Mixed-strategy equilibrum 3.Dynamic games with complete information 3.1.Concepts: credibility, backwards induction, sequential rationality, subgame perfection 3.2. Applications: industrial organization, bargaining, repeated games, cartels and reputation. 4.Static games with incomplete information 4.1.Concepts: Bayesian Nash equilibrium 4.2. Applications: auctions and adverse selection 5.Dynamic games with incomplete information 5.1.Concepts: perfect Bayesian equilibrium 5.2. Applications: job market signaling
Evaluation Method	Performance evaluation is an on-going activity as the term progresses and includes: - short quizz (25%) - group problem solving (20%) - interventions in class, including problem set resolution in the class (5%) - written exam in the end of the term (50%). In order pass the course, the mark of each of the final exams cannot be below 8.0 pts. and the student must register an attendance of not less than 80%. The evaluation is carried out through the final exam (100%).
Teaching Method	The classes will include lectures and practice. The lectures have the main goal of presenting the structure of game theory to the students. The practice part of the classes is meant for conceptual discussions and problem solving, which will include graphical representation and mathematical modelling. Tutoring hours (OT) allow students to clarify specific problems.
Observations	Students are expected to participate actively throughout the semester. This means studying before classes, solving the problem sets, and complying with the course evaluation.
Basic Bibliographic	Watson, J. (2013), Strategy: An introduction to game theory, 3rd edition, W.W. Norton & Company.
Complementar Bibliographic	-Dutta, P. (1999), Strategies and Games: Theory and Practice. MIT Press. -Gibbons, R. (1992), A Primer in Game Theory, Pearson Education. -Osborne, M. (2004), An Introduction to Game Theory, Oxford University Press. -Dixit, A.; Skeath, S.; Reiley Jr., D. (2014), Games of Strategy, 4th edition, W.W. Norton & Company Poderá haver leituras adicionais recomendadas para partes específicas da matéria