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UCL School of Slavonic and East European Studies (SSEES)

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SESS0009 Applied Game Theory for Economics and Business

UCL Credits: 15

Total Learning Hours: 150

ECTS: 7.5

Level: Introductory

 

Term 2

Module Coordinator: Dr Randolph Bruno

Taught By: Dr Randolph Bruno

To find out more about this module, please contact the Module Coordinator.

Weekly Contact Hours: 3.0 (2 hour lecture and 1 hour tutorial per week)
Prerequisites: None
Compulsory Module for: Year 1 students on Economics and Business with East European Studies 

Summative Assessment

Coursework Essay 2000 words (25%), 2 Hour Examination (75%)

Formative Assessment

Students play games based on the theory explained during lectures/tutorial and learn how to find the solution (Nash equilibrium and social optimum). They learn immediately the outcome of the game vis-a-vis their choices and this deepens the subject-matter understanding step by step.

Module Outline

The course aims to provide a comprehensive introduction to applied game theory with real and relevant examples from the business/management world, such as interactions between firms, governments and consumers. The concepts of strategic interaction, strategic form games, games tree, sequential moves, simultaneous moves, Nash Equilibrium, dominance, mixed strategies, uncertainty/incomplete information, dynamic/evolutionary games and repeated games will be unfolded step by step.

The knowledge that students will have acquired by the end of the course will serve as a solid foundation on which more focused and concentrated studies of intermediate microeconomics can be applied. By the end of the course, students will be able:

  • to understand and analytically interpret themain concepts pertaining to game theory in general and strategic interactions in particular
  • to solve simultaneous and sequential games both in complete information and incomplete information settings
  • to identify the existence of strategic interaction in real world examples and to model these examples accordingly
  • to re-interpret the concepts learned in the Introduction to Microeconomics module (e.g. duopoly, Cournot, Bertrand) in a strategic form game.

Aims and objectives

  1. To develop students’ awareness of the issues, concepts, theories pertaining Game Theory and strategic interactions in general
  2. To equip students with knowledge and understanding of different layers of transactions and bargaining power in the economic relationships between firms, consumers and public institutions (Central Bank, governments, EU).
  3. To equip students with necessary learning skills which will prove useful for applying game theory concepts and ideas to interpret real-world phenomena in business (domestic and international),advanced vs. developing countries and the role of trust in repeated interactions.

Indicative Texts

  • Dixit, Avinash and Susan Keath (2015) Games of Strategy, Norton, New York and London, Fourth Edition.
  • Heifetz, Aviad (2012) Game Theory, Interactive Strategies in Economics and Management , Cambridge University Press, UK.
  • Cooper, W.Russell (1999) Coordination Games, Cambridge University Press, UK.
  • Tresch, R. W. (2008) Public Sector Economics, Palgrave Macmillan

AFFILIATES

This module is not open to affiliate students. 

 

Please note: This outline is accurate at the time of publication. Minor amendments may be made prior to the start of the academic year.