ECO 567LEC - Economics and Game Theory

Game theory is a means of studying strategic behavior. What is strategic behavior? It is conduct by a person or a firm, for example, intended to achieve a specified goal; e.g. finding a low purchase price for a commodity or generating a high profit level. Often two entities have directly opposing goals. A simple example is that of a buyer and a seller since the buyer wants to trade at a low price and the seller wants to trade at a high price. In fact, when you think about it, most of the significant deliberate choices that you make each day are strategic. How can we, as scientists, predict accurately the outcomes of strategic conflicts between groups of adversaries? Game theory has become a very useful means of constructing such predictions. The course will examine the development of the theory and will highlight its achievements and failures when applied to economic problems.

Credits: 3