Course syllabus

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Course-PM

ENM140 ENM140 Game theory and rationality lp2 HT22 (7.5 hp)

Course is offered by the department of Space, Earth and Environment

Contact details

Claes Andersson (Examiner, lecturer, project supervisor)
claeand@chalmers.se 

Juan Viguera Diez (Teaching assistant, project supervisor)
viguera@student.chalmers.se

Course purpose

Aim

The aim of this course is to give an introduction to game theory and evolutionary models within the field, in order to inspire and engage the students so that they can identify and explore game-theoretic dilemmas or situations during the studies as well as in their future work-life. This is achieved through examining basic game-theoretic concepts including the concept of rationality. The students, typically at the end of their undergraduate studies, are tasked individually as well as in group with acquiring knowledge about a series of game-theoretic applications. We focus on the effects of individual rationality on collective outcomes, as well as the resulting behavior of agents with different strategies in a large population.

We cover theory of general principles of rational action and examine known limitations on how well this describes human behavior in reality. Secondary aims include getting hands-on experience of modelling in a game-theoretic context as well as training in reading and presenting scientific articles.

The course is designed to not be overly technical, but to focus more on developing an understanding of basic ideas and principles as a basis for wider explorations and more in-depth studies. The course offers opportunity to do so, within an area of choice, in the student seminar and project work. 

Content

Game theory is the scientific study of strategic interaction between rational agents, involving analysis of phenomena such as cooperation and conflict in a wide range of biological, economic and social systems. Game theory and its extensions are continuously applied to understand situations such as climate negotiations, how plants grow their roots and distribute seeds under competition, to warfare and auctions.
 
The content of the course will be influenced by the students attending it (i.e. other topics may be added to the following list). Topics covered in previous years' version of the course include:
Basic game-theoretic concepts, theory and principles of rational decision-making, backward induction and the rationality paradox, analysis of repeated interaction, tragedy of the commons, evolutionary game theory, public good games, agent-based models in economics, behavioral economics and the environment, bargaining theory and dynamic games.

Schedule

Lectures and seminars are held (approximately) each week on

  • Monday at 10:00-11:45
  • Wednesday at 10:00-11:45
  • Wednesday at 13:15-15:00

Detailed information on each lecture and deadline can be found in the course documentation. 

Course literature

The main course book is Kevin Leyton-Brown and Yoav Shoham, Essentials of Game Theory: A Concise, Multidisciplinary Introduction (2008).
The book can be downloaded free of charge through Chalmers’ library here.

Selected chapters and examples may be distributed from Herbert Gintis, Game Theory Evolving: A Problem-Centered Introduction to Modeling Strategic Interaction (Second Edition, 2009). The book is available as ebook at Chalmers’ library here.

The following video lectures in game theory may be worth checking out: YouTube

Other course materials, preparations for seminars, etc., are provided in Modules.

Course design

Please see the course documentation for more information, including on grading, deadlines and so on, in the course document.

Individual assignments

There are two individual assignments in the course:

  1. Formulate a game idea as possible basis for a project
  2. Design and implement strategies for a game tournament

Mandatory midterm exam

There will be a mandatory midterm exam that contributes to your grade in the course. There is a minimum passing score of 6 points out of a maximum of 21 that you have to reach to pass the course. 

Group work

All students will be part of a group. Each group will do the following things: (1) prepare and lead a seminar for half the class, (2) work on a modeling and simulation project, and (3) provide peer-review feedback on another group’s draft project report. 

Student-led seminars

Each group will prepare and lead a 45-minute seminar. All group members must take active part in the work. 

Projects

A major part of the course (40-50%; 80-100 hours) is a game theory project, involving modeling, simulation and analysis of a model selected by the project group. As a part of the project work, your group will also provide peer-review comments on one other group’s preliminary project report. You must obtain a minimum score of 9 out of a maximum of 21 on the final project report to obtain a passing grade.

Changes made since the last occasion

Documentation has been collected into a single document.

Learning objectives and syllabus

After completed course the student should be able to:

  •  formulate a game given a specific strategic interaction of interest within their own discipline
  •  summarize and present game-theoretic literature corresponding to that assigned during the course
  • define and apply models of decision-making agents with actions, interactions and strategies
  • construct, implement and simulate a set of their own strategies that will compete in a computer-based tournament
  • describe and explain two basic theories of rationality and their known limitations
  • use different techniques to find the Nash equilibria in games
  • differentiate between and apply extensive and normal (or strategic) form games
  • compare and reflect upon the expected outcome from the backward induction principle with situations in real life and the limitations it highlights for the use of the game theory and the concept of rationality
  • eliminate strategies from a game based on domination arguments
  • identify, analyze and argue about the existence of social dilemmas, such as the tragedy of the commons and public goods games including examples of natural, economic and social origin
  • define and apply the concepts of Pareto optimality
  • define and solve for mixed-strategy equilibrium
  • differentiate between equilibrium in game theory and stable strategies in evolutionary game theory

Link to the syllabus on Studieportalen: Study plan.

Examination form

Grading and compulsory attendance

To get a passing grade you need to complete the compulsory course components:

  • Attendance on all project seminars (absence with valid reasons must be cleared by us, and compensatory assignments will be made).
  • The two individual assignments.
  • Passing grade on the midterm exam.
  • Oral presentations of project results.
  • Submission of a draft report.
  • Submission of a final project report, including the contribution report.

All assignments, presentations, and other duties must be completed in time. If there are very special circumstances a separate examination may be possible to arrange. If you have such a need, please let us know as soon as possible.

More information on grading criteria and deadlines are found in the document course documentation.

Course summary:

Date Details Due