ALGORITHMIC GAME THEORY (BAI405D)

ALGORITHMIC GAME THEORY

Course Code BAI405D 
CIE Marks 50
Teaching Hours/Week (L:T:P: S) 2:2:0:0 
SEE Marks 50
Total Hours of Pedagogy 40 
Total Marks 100
Credits 03 
Exam Hours 03
Examination type (SEE) Theory

Module-1

Introduction to Strategic Games: What is game theory? The theory of rational choice,

Strategic games; Examples: The prisoner’s dilemma, Bach or Stravinsky, Matching pennies;

Nash equilibrium; Examples of Nash equilibrium; Best response functions; Dominated

actions.

Module-2

Introduction; Strategic games in which players may randomize; Mixed strategy Nash

equilibrium; Dominated actions; Pure equilibrium when randomization is allowed.

Illustration: Expert Diagnosis; Equilibrium in a single population. 

Module-3

Extensive games with perfect information; Strategies and outcomes; Nash equilibrium; Subgame perfect equilibrium; Finding sub-game perfect equilibria of finite horizon games:

Backward induction; Illustrations: The ultimatum game, Stackelberg’s model of duopoly.

Module-4

Bayesian Games, Motivational examples; General definitions; Two examples concerning

information; Illustrations: Cournot’s duopoly game with imperfect information, Providing a

public good; Auctions: Auctions with an arbitrary distribution of valuations. 

Module-5

Competative Games: Strictly competitive games and maximization.

Repeated games: The main idea; Preferences; Repeated games; Finitely and infinitely

repeated Prisoner’s dilemma; Strategies in an infinitely repeated Prisoner’s dilemma; Nash

equilibrium of an infinitely repeated Prisoner’s dilemma, Nash equilibrium payoffs of an

infinitely repeated Prisoner’s dilemma.

Suggested Learning Resources:

Text Books:

1. Martin Osborne: “An Introduction to Game Theory”, Oxford University Press, First

Indian Edition, 2009, 7th impression, ISBN – 0195128958.

Reference Books:

1. Roger B. Myerson: “Analysis of Conflict Game Theory”, Re-print Edition, Harvard

University Press, 2008, ISBN – 978-0674341166.

2. Frederick S. Hillier and Gerald J. Lieberman: “Introduction to Operations Research,

Concepts and Cases”, 9th Edition; Tata McGraw Hill, 2010, ISBN – 0073376299.

3. Joel Watson: “An Introduction to Game Theory” Strategy, 2nd Edition, W.W. Norton

&Company, 2007, ISBN – 9780393929348.

Web links and Video Lectures (e-Resources):

• http://nptel.ac.in/courses.php?disciplineID=111

• http://www.class-central.com/subject/math(MOOCs)

• http://academicearth.org/

• VTU e-Shikshana Program

• VTU EDUSAT Program.