Game theory, the mathematical theory of interactive decision making, has significantly changed how economists think and model economic problems. It has been similarly influential in the political sciences, biology, computer sciences and philosophy. It provides a methodology for analysing the strategic aspects of situations of conflict and cooperation. The module will develop further what students have learned about the subject in intermediate microeconomics. Throughout, a wide range of examples will be used to introduce game theoretic core concepts and ideas, and illustrate their applications to economics and political sciences.
The whole content of this module is a neutral methodology which is applicable across disciplines and across geographic or national boundaries.
All of the resources for this module are available on the ELE (Exeter Learning Environment).
Strategic and critical thinking and an understanding how incentives work are essential for working and operating professionally in practically any economic activity or institution (in the financial or labor markets) and any social or political institutions (such as parliaments, local councils, committees, boards of directors etc.) whether in the public or private sector.
Research in Teaching
The module is taught by active researchers in game theory who will bring their experience and expertise to the various topics taught in class.
Full module specification
|Module title:||Game Theory|
BEE2025 Microeconomics 2
|Duration of module:||
Duration (weeks) - term 2: |
The module builds on the basic game theory as it is taught in intermediate microeconomics modules and develops it further. It provides a more thorough discussion of basic and more advanced game theoretic concepts
ILO: Module-specific skills
- 1. explain how game theory can be used to model and analyse interactive decision situations involving several decision makers;
- 2. demonstrate comprehensive and detailed knowledge and understanding of some main topics in game theory.
ILO: Discipline-specific skills
- 3. be aware and able to explain how game theory is a useful tool in many economic sub disciplines;
- 4. explain how incentives matter and affect behaviour.
ILO: Personal and key skills
- 5. effectively communicate concepts/definitions/arguments;
- 6. use strategic analysis to understand situations of conflict and cooperation.
Learning activities and teaching methods (given in hours of study time)
|Scheduled Learning and Teaching Activities||Guided independent study||Placement / study abroad|
Details of learning activities and teaching methods
|Category||Hours of study time||Description|
|Scheduled Learning and Teaching Activity||22||Lectures (11 x 2 hours)|
|Scheduled Learning and Teaching Activity||5||Tutorials (5 x 1 hour)|
|Guided Independent Study||123||Reading, research and reflection; preparation for tutorials; preparation for Mid-term test and Examination.|
|Form of assessment||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Tutorial Questions||In class||1-6||In class feedback|
Summative assessment (% of credit)
|Coursework||Written exams||Practical exams|
Details of summative assessment
|Form of assessment||% of credit||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Class Test 1||10||1 hour||1-6||Verbal feedback and indicative answers|
|Class Test 2||10||1 hour||1-6||Verbal feedback and indicative answers|
|Homework (in groups)||10||One Computer-based exercise, 2-3 per group.||1-6||Indicative answers|
|Examination||70||2 hours||1-6||Indicative answers|
Details of re-assessment (where required by referral or deferral)
|Original form of assessment||Form of re-assessment||ILOs re-assessed||Timescale for re-assessment|
|Class Test 1 (10%), Class Test 2 (10%), Homework (10%), Examination (70%).||Examination (100%), 2 hours||1-6||August/September Reassessment Period|
Strategic Games with Complete Information
(a) Iterated elimination of dominated strategies;
(b) Nash equilibrium;
Dynamic Games with Complete Information
(a) Nash equilibrium in sequential games.
(b) Refinements: Subgame perfect equilibrium
Applications of SPE: Drafts.
(a) Gale-Shapley, Deferred Acceptance Algorithm
(b) Top Trading Cycles.
Games with Incomplete Information (time permitting)
Indicative learning resources - Basic reading
Recommended textbooks are:
Michael Maschler, Eilon Solan and Shmuel Zamir (2013), Game Theory, Cambridge MA, Cambridge University Press, ISBN-13: 978-1107005488
Martin Osborne (2009), An Introduction to Game Theory, Oxford, Oxford University Press, ISBN-13: 978-0195322484
A Course in Game Theory, M.J. Osborne, A. Rubinstein, MIT Press, 1994. (free for download at http://gametheory.tau.ac.il/arielDocs/)
Ken Binmore (2007), Playing for real, A text on game theory, Oxford, Oxford University Press, ISBN-13: 978-0195300574
Module has an active ELE page?
Indicative learning resources - Web based and electronic resources
- ELE – College to provide hyperlink to appropriate pages
Last revision date