Microeconomics II (Game Theory)

Since the 1970s, questions about material supply and demand have become less central in economics, and questions about human interactions and information have become more central. Game theory provides the basic tools for investigating the societal inefficiencies due to selfish strategic behavior of individuals, and ways to minimize those inefficiencies. In its first years, game theory was purely theoretical, so as to develop its basic concepts. It was later extended to experimental economics, and nowadays its tools are used in virtually every economic discipline. The course provides a framework for the analysis of situations of conflict. Emphasis is put on the modelling of situations of strategic interaction. Through the lens of the distinct notions of equilibria, the course offers ways to restrict the set of possible outcomes in games. The course discusses many well-known examples of strategic interaction.