Welcome to Game Theory

About this course: This course provides a brief introduction to game theory. Our main goal is to understand the basic ideas behind the key concepts in game theory, such as equilibrium, rationality, and cooperation. The course uses very little mathematics, and it is ideal for those who are looking for a conceptual introduction to game theory. Business competition, political campaigns, the struggle for existence by animals and plants, and so on, can all be regarded as a kind of “game,” in which individuals try to do their best against others. Game theory provides a general framework to describe and analyze how individuals behave in such “strategic” situations. This course focuses on the key concepts in game theory, and attempts to outline the informal basic ideas that are often hidden behind mathematical definitions. Game theory has been applied to a number of disciplines, including economics, political science, psychology, sociology, biology, and computer science. Therefore, a warm welcome is extended to audiences from all fields who are interested in what game theory is all about.

Who is this class for: This course is aimed at the beginners of economics and game theory: - No prior knowledge of economics or game theory is required. - No knowledge of math beyond simple arithmetic is required.

Created by:  The University of Tokyo

• Taught by:  Michihiro Kandori, Professor

  Faculty of Economics

Level Beginner Commitment 3-4 hours/week Language English How To Pass Pass all graded assignments to complete the course. User Ratings 4.6 stars Average User Rating 4.6See what learners said Coursework

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The University of Tokyo The University of Tokyo was established in 1877 as the first national university in Japan. As a leading research university, UTokyo offers courses in essentially all academic disciplines at both undergraduate and graduate levels and conducts research across the full spectrum of academic activity.

Syllabus


WEEK 1


Why Do We Need Game Theory, and What Does it Tell Us?



Is it possible to analyze a wide variety of social and economic problems using a unified framework? In the first module, we address this question. We will see that the concept of rational decision making is useful, but it is not quite sufficient to provide governing principles. Motivated examples and some history of game theory will be provided. You will also be asked to play a simple card game to see how it feels to make your decisions strategically.


12 videos, 4 readings, 3 practice quizzes expand

1. Video: Course Preview
2. Reading: Course Description
3. Reading: Syllabus
4. Video: 1-1 What is Game Theory?
5. Video: 1-2 Modelling Social Problems as a "Game"
6. Video: 1-3 In Search for the Governing Principle
7. Video: 1-4 Concerns About a Mathematical Theory of Human Behavior
8. Practice Quiz: Practice Quiz 1.1
9. Video: 1-5 Let's Play a Game
10. Video: Card Game Tutorial (No Audio)
11. Reading: Card Game Challenge Instruction
12. Video: 1-6 John Nash Discovered the Governing Principle
13. Video: 1-7 Nash Equilibrium
14. Practice Quiz: Practice Quiz 1.2
15. Video: 1-8 Traffic Game in Reality
16. Reading: (Supplementary Reading Material) Convergence to Nash Equilibrium in the Traffic Game
17. Video: 1-9 Location Game
18. Video: 1-10 Policies of Two Parties
19. Practice Quiz: Practice Quiz 1.3

Graded: Graded Quiz 1

WEEK 2


Understanding Nash equilibrium
The basic solution concept of game theory is Nash equilibrium. In Module 2, we try to understand this central concept through various examples and ask the following crucial question: how do players come to play a Nash equilibrium?


10 videos, 3 practice quizzes expand

1. Video: 2-1 Nash Equilibrium and the Prisoner’s Dilemma
2. Video: 2-2 Coordination Game and Self-Fulfilling Prophecy
3. Video: 2-3 Market Competition
4. Practice Quiz: Practice Quiz 2.1
5. Video: 2-4 Why Do People Come to Play Nash Equilibrium? Part I
6. Video: 2-5 Why Do People Come to Play Nash Equilibrium? Part II
7. Video: 2-6 Why Do People Come to Play Nash Equilibrium? Part III
8. Video: 2-7 Stylized Facts and Nash Equilibrium
9. Practice Quiz: Practice Quiz 2.2
10. Video: 2-8 Make Yourself Unpredictable: Mixed Strategy Equilibrium
11. Video: 2-9 Sports Games and Game Theory
12. Video: 2-10 Nash Equilibrium Exists in All Games
13. Practice Quiz: Practice Quiz 2.3

Graded: Graded Quiz 2

WEEK 3


Rationality, Knowledge, and Evolution in Games



In Module 3, we will dig deeper into the relationship between rationality and Nash equilibrium. We will consider the whole spectrum of possible intellectual capacities of players, spanning the range from unlimited ability for sophisticated reasoning to absolute zero intelligence. In the end, you will see that Nash equilibrium can emerge under a fairly wide range of intellectual capacities of players.


9 videos, 1 reading, 3 practice quizzes expand

1. Video: 3-1 Digression: The Card Game Revisited
2. Video: 3-2 Digression: How You Played the Card Game and Addressing the Concerns about Game Theory
3. Reading: Aggregated Result of the Card Game Challenge
4. Video: 3-3 “Payoffs” in a Game: What Exactly Are Those Numbers?
5. Practice Quiz: Practice Quiz 3.1
6. Video: 3-4 What Does it Mean That a Player is Rational?
7. Video: 3-5 Domination: Strategies That Are “Obviously Good or Bad”
8. Video: 3-6 Common Knowledge of Rationality
9. Practice Quiz: Practice Quiz 3.2
10. Video: 3-7 Low Rationality: What Happens if Players Are Not Very Smart?
11. Video: 3-8 Game Theory Under Zero-Intelligence: Biological Evolution
12. Video: 3-9 Fig Wasps Play a Nash Equilibrium
13. Practice Quiz: Practice Quiz 3.3

Graded: Graded Quiz 3

WEEK 4


Sustaining Cooperation



The final module is devoted to the most important and most general message of game theory: rational behavior quite often leads to a socially undesirable outcome. We will first try to understand the basic reason for this, and then see how this insight of game theory has made fundamental impacts in the natural and social sciences. Finally, we will learn some general methods to overcome this problem.


11 videos, 1 reading, 3 practice quizzes expand

1. Video: 4-1 Group Rationality and The Rationality of Individuals
2. Video: 4-2 Why is Group Rationality Different From Rationality of Individuals?
3. Practice Quiz: Practice Quiz 4.1
4. Video: 4-3 Group Rationality vs. Rationality of Individuals in Biological Evolution
5. Video: 4-4 Group Rationality vs. Rationality of Individuals in Social Thought
6. Video: 4-5 How to Enforce Socially Desirable Outcomes
7. Practice Quiz: Practice Quiz 4.2
8. Video: 4-6 Cooperation of gas Stations in Long-Term Relationship Part I: Need For Cooperation
9. Video: 4-7 Cooperation of Gas Stations in Long-Term Relationship Part II: Mechanism of Cooperation
10. Reading: (Supplementary Reading Material) Why People Discount Future Payoff?
11. Video: 4-8 Reputation and Brand Name
12. Video: 4-9 Cooperation in Loosely Knit Organization
13. Video: 4-10 Summary of the Course
14. Practice Quiz: Practice Quiz 4.3
15. Video: Final Message

Graded: Graded Quiz 4