Game Theory


“If I go downstairs to investigate a noise at night, with a gun in my hand, and find myself face to face with a burglar who has a gun in his hand, there is a danger of an outcome that neither of us desires. Even if he prefers to just leave quietly, and I wish him to, there is danger that he may think I want to shoot, and shoot first”

Course Description

Game Theory is a name for a collection of analytic tools which economists use to understand strategic interactions. The aim of this course is to learn how to analyze strategic behavior of rational decision makers. We say that decision making is strategic if it involves taking into account what other agents want, know, believe and do. Strategic behavior is an important component in interactions such as market competition between firms, bilateral bargaining, auctions, voting, and information transmission. In this course we cover strategic-form games with complete information, strategic-form games with incomplete information, dynamic games, and equilibrium concepts for analyzing these games. The focus of the course is on three equally important fronts: First, the students should get a good understanding (and some experience) of how to model a strategic environment as a game. Second, the students will learn and how to solve a game-theoretic model appropriately. The definitions and propositions included in the course aim .to provide analytical tools for students achieving this. Third, the course will contain an overview of some classic applications of game theory mostly in economics. The applications are put forward to explain economic phenomena, to illustrate theories, and in some cases to add fun to a theoretical course.


Sunday & Tuesday 8:00 – 9:30, Classroom 6

Office Hours

Room 118; Tuesday 9:30 – 10:30 or by appointment (email:


The evaluation of the course is based on

quizzes (15%)

mid-term exam (40%)

final exam (45%)

Students performance in classes has a 5% bonus mark.


Osborne, Martin & Ariel Rubinstein (OR); A Course in Game Theory; MIT Press. Osborne, Martin (Os); An introduction to Game Theory; Oxford University Press.

Other References

Other references which might be used are (some other papers and books might be added to the list later in the term): Gibbons, Robert; A Primer in Game Theory; Prentice Hall. Fudenberg Drew & Jean Tirole; Game Theory; MIT Press.

Exam Schedule

Quizzes: TBC

Mid-Term: Wednesday 1395/01/30 at 9:00 am

Final: Saturday 1395/03/31 at 9:00 am

Lecture Notes

  • No #1Part 1

    Strategic Games with Complete Information

    Download File

  • No #2Part 2

    Strategic Games with Complete Information

    Download File

  • No #3Part 3

    Strategic Games with Complete Information

    Download File

  • No #4Part 4

    Strategic Games with Complete Information

    Download File

  • No #5Part 5

    Strategic Games with Complete Information

    Download File

  • No #6Part 6

    Strategic Games with Incomplete Information

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  • No #7Part 7

    Extensive Games with Perfect Information

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  • No #8Part 8

    Extensive Games with Perfect Information and Simultaneous Moves

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  • No #9Part 9

    Repeated Games

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  • No #10Part 10

    Extensive Games with Imperfect Information

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  • No #11Part 11

    Bargaining Games / Cooperative Games

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  • No #12Part 12

    Mechanism Design - Part 1

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Problem Sets

Exam Samples

    Exam Results