Programme PGPX Term IV Academic Year 2021-22

Course title Game Theory and Experiments Area Economics Credits 0.75

Prof. Viswanath Pingali,
Prof. Jeevant Rampal

Course Description & Objectives
This course develops several standard tools and equilibrium concepts that are used in analysing decision making in various situations. The main objective of this course is to develop the fundamental idea behind Nash Equilibrium, and extensions to the idea of Nash Equilibrium, namely: Subgame Perfect Nash Equilibrium and Bayesian Nash Equilibrium. Once we develop the idea of an equilibrium we will spend a lot of time understanding some of the real world applications of these equilibria. One of the fundamental assumptions of game theory is that the agents are rational. However, there are reasons to question this assumption. The ought to behaviour and the actual behaviour by the agents could be quite contradictory, and therefore, it is important for us to understand both sides of the story. That is where behavioural economics comes into the picture. We spend a lot of time understanding the experiments that were conducted in the real world to discuss the intuition we develop.

- Introduce students to the basic concepts of game theory
- Develop intuition on how to analyse situations as games
- Introduce students to the ideas of behavioural and experimental economics
- Develop an understanding of how irrational behaviour affects decision making

Cases, lectures, and in class experiments