Courses:

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Readings are also listed by session below.

Osborne, and Rubinstein. A Course in Game Theory. Cambridge, MA: MIT Press, 1994. ISBN: 0262650401. (Primary)

Fudenberg, Drew, and Jean Tirole. Game Theory. Cambridge, MA: MIT Press, 1991. ISBN: 0262061414. (Primary)

Kreps, David M. Notes on the Theory of Choice. Boulder, CO: Westview Press, 1988. ISBN: 0813375533.

Weibull, Jörgen W. Evolutionary Game Theory. Cambridge, MA: MIT Press, 1995. ISBN: 0262231816. (Supplementary)

Fudenberg, Drew, and David K. Levine. The Theory of Learning in Games. Cambridge, MA: MIT Press, 1998. ISBN: 0262061945.

The supplementary readings in this course are drawn from the following journals.

Articles in Games and Economic Behavior 5 (1993).

Articles in Journal of Economic Theory 59 (1993).

Articles before 1997 in Econometrica, Review of Economic Studies or Quarterly Journal of Economics.

Citations marked with an asterisk indicate course textbooks.

Course readings.

LEC #	TOPICS	READINGS
1-2	Choice Under Uncertainty	*Kreps. Chapters 4, 5, 8, and 9. Von Neumann, J., and O. Morgenstern. Theory of Games and Economic Behavior. Princeton, NJ: Princeton University Press, 1944. (Reprint available, 2004. ISBN: 0691119937.) Savage, Leonard. The Foundations of Statistics. New York, NY: Wiley, 1954. Fishburn, P. Utility Theory for Decision Making. New York, NY: Wiley, 1970. ISBN: 0471260606. Ellsberg, D. "Risk, Ambiguity, and the Savage Axioms." Quarterly Journal of Economics 75 (1961): 643-669. Machina, M., and D. Schmeidler. "A More Robust Definition of Subjective Probability." Econometrica 60 (1992): 745-780. Allais, M. "Le Comportement de l'Homme Rationnel devant le Risque: Critique des Postulats et Axiomes de l'Ecole Americaine." Econometrica 21 (1953): 503-546. Schmeidler, D. "Subjective Probability and Expected Utility without Additivity." Econometrica 57 (1989): 571-587.
3-4	Introduction Definitions (Nash, Perfect, Sequential Equilibrium, Rationalizability, Correlated Equilibrium, Backward Induction, Forward Induction, Sequential Rationality, Self Confirming Equilibria)	*Osborne, and Rubinstein. Chapters 2, 3, 4, 6, 11, and 12. *Fudenberg, and Tirole. Chapters 1, 2, and 3. Aumann, R. "Backward Induction and Common Knowledge of Rationality." Games and Economic Behavior 8 (1995): 6-19 Ben-Porath, E. "Rationality, Nash Equilibrium and Backward Induction in Perfect Information Games." Review of Economic Studies 64 (1997): 23-46. Brandenburger, Adam. "The Power of Paradox: Some Recent Developments in Interactive Epistemology." 2001 Summer Workshop of the Stanford Institute for Theoretical Economics, August 2001. Bernheim, D. "Rationalizable Strategic Behavior." Econometrica 52 (1984): 1007-1028. Pearce, D. "Rationalizable Strategic Behavior and the Problem of Perfection." Econometrica 52 (1984): 1029-1050. Aumann, R. "Correlated Equilibrium as an Expression of Bayesian Rationality." Econometrica 55 (1987): 1-18. Kreps, and Wilson. "Sequential Equilibria." Econometrica 50 (1982): 863-894. Dekel, Eddie, Drew Fudenberg, and David Levine. "Payoff Information and Self-Confirming Equilibrium." Journal of Economic Theory 89, no. 2 (December 1999): 165-185. (PDF) Fudenberg, D., and D. Kreps. "Learning in Extensive Games, I: Self-Confirming Equilibrium." Games and Economic Behavior 8 (1995): 20-55.
5-7	Classical Topics: Repeated Games	*Osborne, and Rubinstein. Chapter 8. *Fudenberg, and Tirole. Chapter 5. Abreu, D., D. Pearce, and E. Stacchetti. "Toward a theory of discounted repeated games with imperfect monitoring." Econometrica 58 (September 1990): 1041-1063. Abreu, D., P. Milgrom, and D. Pearce. "Information and timing in Repeated partnerships." Econometrica 59 (1991): 1713-1733. Fudenberg, D., and E. Maskin. "The Folk Theorem for Repeated Games with Discounting and Incomplete Information." Econometrica 54 (1986): 533-54. Fudenberg, D., D. Levine, and E. Maskin. "The Folk Theorem in Repeated Games with Imperfect Public Information." Econometrica 62 (1994): 997-1039.
8-9	Classical Topics: Cheap Talk, Signaling, and Reputation	Crawford, V., and J. Sobel. "Strategic Information Transmission." Econometrica 50 (1982): 1431-1451. Myerson, R. "Multi-Stage Games with Communication." Econometrica 54 (1986): 323-358. Battaglini, M. "Multiple Referrals and Multidimensional Cheap Talk." Econometrica 70 (2002): 379-1401. *Fudenberg, and Tirole. Chapter 9. Cho, I.-K., and D. Kreps. "Signalling Games and Stable Equilibria." Quarterly Journal of Economics 102 (1987): 179-221. Kreps, D., and R. Wilson. "Reputation and Imperfect Information." Journal of Economic Theory 27 (1982): 253-279. Milgrom, and Roberts. "Predation, reputation and entry deterrence." Journal of Economic Theory 27 (1982): 280-312. Kreps, D., P. Milgrom, J. Roberts, and R. Wilson. "Rational Cooperation in the Finitely Repeated Prisoners' Dilemma." Journal of Economic Theory 27 (1982): 245-52. Fudenberg, D., and D. Levine. "Reputation and Equilibrium Selection in Games with a Patient Player." Econometrica 57 (1989): 759-778. Celentani, M., D. Fudenberg, D. Levine, and W. Pesendorfer. "Maintaining a Reputation against a Long Lived Opponent." Econometrica 64 (1996): 691-704. Ely, J., and J. Valimaki. "Bad Reputation." Quarterly Journal of Economics 118 (2003): 785-814.
10	Classical Topics: Bargaining Theory	*Osborne, and Rubinstein. Chapters 7, and 15. *Fudenberg, and Tirole. Chapter 10. Rubinstein, A. "Perfect Equilibrium in a Bargaining Model." Econometrica 50 (1982): 97-109. Gul, F., H. Sonnenschein, and Robert Wilson. "Foundations of Dynamic Monopoly and the Coase Conjecture." Journal of Economic Theory 39 (1986): 155-90. Abreu, D., and F. Gul. "Bargaining and Reputation." Econometrica 68 (2000): 85-117. Nash, J. "The bargaining problem." Econometrica 18 (1950): 155-62.
11	Review
12	Classical Topics: Supermodular Games	Milgrom, P., and J. Roberts. "Rationalizability and Learning in Games with Strategic Complementarities." Econometrica 58 (1990): 1255-1277. Vives, X. "Nash Equilibrium with Strategic Complementarities." Journal of Mathematical Economics 19 (1990): 305-321 Topkis, D. M. Supermodularity and Complementarity. Princeton, NJ: Princeton University Press, 1998. ISBN: 0691032440.
13-16	Learning and Evolutionary Foundations	*Weibull. Chapters 2, and 3. *Fudenberg, and Levine. Chapters 4, 5, and 6. Noldeke, G., and L. Samuelson. "An Evolutionary Analysis of Forward and Backward Induction." Games and Economic Behavior 5 (1993): 425-454. Kandori, M., G. Mailath, and R. Rob. "Learning, Mutation, and Long-run Equilibria in Games." Econometrica 61 (1993): 29-56. Young, P. "The Evolution of Conventions." Econometrica 61 (1993): 57-84. Ellison, G. "Learning, Local Interaction and Coordination." Econometrica 61 (1993): 1047-1071.
17-19	Epistemic Foundations	*Fudenberg, and Tirole. Chapters 2-14. Yildiz. Lecture Notes. Aumann, R. "Interactive Epistemology." Working Paper, Center for Rationality and Interactive Decision Theory, Hebrew University, February 1995. Dekel, Eddie, and Faruk Gul. "Rationality and Knowledge in Game Theory." In Advances in Economics and Econometrics: Theory and Applications. Edited by David M. Kreps and Kenneth F. Wallis. Cambridge, UK: Cambridge University Press, 1997, pp. 87-172. ISBN: 0521580110. Aumann, Robert. "Agreeing to disagree." Annals of Statistics 4 (1976): 1236-1239. Mertens, and Zamir. "Formulation of Bayesian Analysis for Games with Incomplete Information." International Journal of Game Theory 10 (1985): 619-632. Brandenburger, A., and E. Dekel. "Hierarchies of Beliefs and Common Knowledge." Journal of Economic Theory 59 (1993): 189-198. Tan, T., and S. Werlang. "The Bayesian Foundation of Solution Concepts of Games." Journal of Economic Theory 45 (1988): 370-391. Aumann, R. "Correlated Equilibrium as an Expresssion of Bayesian Rationality." Econometrica 55 (1987): 1-18. Aumann, R., and A. Brandenburger. "Epistemic Conditions for Nash Equilibrium." Econometrica 63 (1995): 1161-1180.
20	Review
21	New Topics: Global Games	Morris, Stephen, and Hyun Song Shin. "Global Games: Theory and Applications." In Advances in Economics and Econometrics (Proceedings of the Eighth World Congress of the Econometric Society). Edited by M. Dewatripont, L. Hansen, and S. Turnovsky. Cambridge, UK: Cambridge University Press, 2003, pp. 56-114. ISBN: 0521524113. Carlsson, H., and E. van Damme. "Global Games and Equilibrium Selection." Econometrica 61 (1993): 989-1018. Morris, S., and H. Shin "Unique Equilibrium in a Model of Self-Fulfilling Attacks." American Economic Review 88 (1998): 587-597.
22	New Topics: Heterogeneous Beliefs	Yildiz, M. "Bargaining without a common prior - An immediate agreement theorem." Econometrica 71, no. 3 (2003): 793-811. Van den Steen. "Organizational Beliefs and Managerial Vision." Journal of Law, Economics, and Organization (2004). (Forthcoming) Yildiz, Muhamet. "Wishful Thinking in Strategic Environments." MIT Department of Economics Working Paper No. 04-31 (September 1, 2004).
23	New Topics: Psychological Games	Geanakoplos, John, David Pearce, and Ennio Stacchetti. "Psychological Games and Sequential Rationality." Games and Economic Behavior 1 (1989): 60-79. Rabin, Matthew. "Incorporating Fairness into Game Theory and Economics." American Economic Review 5 (1993): 1281-1302.
24-25	New Topics: Game Theory with Non-Expected Utility	Dekel, E., Safra, Z., and U. Segal. "Existence and Dynamic Consistency of Nash Equilibrium with Nonexpected Utility Preferences." Journal of Economic Theory 55 (1991): 229-46. Lo, K. -C. "Extensive Form Games with Uncertainty Averse Players." Games and Economic Behavior 28 (1999): 256-270. Siniscalchi, M. "Dynamic Choice under Ambiguity." mimeo, Northwestern University. (2004). (PDF) Karni E., and Z. Safra. "Dynamic Consistency, Revelations in Auctions and the Structure of Preferences." Review of Economic Studies 56 (1989): 421-433. Bose, S., E. Ozdenoren, and A. Pape. "Optimal Auctions with Ambiguity." mimeo, University of Michigan. (2004). (PDF) Mukerji, S. "Ambiguity Aversion and Incompleteness of Contractual Form." American Economic Review 88 (1998): 1207-1231.