Programme

PhD

Term

VI

Academic Year

2021-22

Course title

Applied Game Theory

Area

Economics

Credits

1.00

Instructor(s)

Prof. Jeevant Rampal

Course Description & Objectives

Objective: Game theory deals with analyzing all strategic situations. As such, applications of game theory are ubiquitous in the social sciences (among other disciplines). This course covers the leading theoretical applications of game theory in the economics literature, i.e. ‘the greatest hits' of applied game theory. These applications of game theory have been extended to all management disciplines, but also far beyond. This course will provide a semi-formal analysis of the game-theoretic aspects of the path-defining paper in each area. These old/recent classic papers provide insights into the workings of the theory of many different research and real-life applications, and as such are of importance to anyone working in these applications. Examples: the Email game (Rubinstein (1989)) provides an understanding of contagion, financial bubbles/crashes, supply chain disruptions, and so on. Contests (Tullock (1980), Esteban & Ray (2001)) are observed in R&D, politics, rent seeking, and so on. Networks (Jackson & Wolinksy (1996)) are important to understand financial decisions, corporate governance, and so on. Industrial organization (e.g. Dixit (1980), Rochet & Tirole (2003)) is essential to understand firms’ strategic choices like capacity and pricing etc. Bargaining (Rubinstein (1982) provides essential insights into negotiations. Similarly, each of the other topics and their classic papers has applications far beyond anything one can summarize here. Prospective students are encouraged to look up the papers in this reading list and/or contact the instructor to understand more about the scope of this course. Class discussion will highlight the application of each paper to the students’ area of research interest. To this end, during the sessions, students will present the application of the papers in the reading list to their area of research interest. Students can use papers that cite a paper in the reading list or the student’s own research. Thus, the reading list has been kept relatively “thin,” since the papers in the reading list have thousands of citations, and therefore many current applications to choose from.