14.126 | Spring 2016 | Graduate

Game Theory


[Game Theory] = Buy at MIT Press Fudenberg, Drew, and Jean Tirole. Game Theory. MIT Press, 1991. ISBN: 9780262061414.

Topics  Readings  
1. Solution Concepts for Static Games

Complete information: Rationalizability, Nash equilibrium, epistemic foundations


[Game Theory] Chapters 1 and 2.

Bernheim, B. Douglas. “Rationalizable Strategic Behavior.” (PDF) Econometrica 52, no. 4 (1984): 1007–28.

Pearce, David G. “Rationalizable Strategic Behavior and the Problem of Perfection.” Econometrica 52, no. 4 (1984): 1029–50.

Aumann, Robert, and Adam Brandenburger. “Epistemic Conditions for Nash Equilibrium.” Econometrica 63,  no. 5 (1995): 1161–80.

Incomplete information: Bayesian Nash equilibrium, interim correlated rationalizability

Brandenburger, Adam, and Eddie Dekel. “Hierarchies of Beliefs and Common Knowledge.” Journal of Economic Theory 59, no. 1 (1993): 189–98.

Dekel, Eddie, Drew Fudenberg, and Stephen Morris.“Interim Correlated Rationalizability” (PDF) Theoretical Economics, no. 2 (2007): 15–40.

———. “Topologies On Types.” (PDF) Theoretical Economics, no. 1 (2006): 275–309.

2. Solution Concepts for Extensive-Form Games
Backwards induction, subgame perfection, iterated conditional dominance [Game Theory] Chapter 3.  
Bargaining with complete information

Rubinstein, Ariel. “Perfect Equilibrium in a Bargaining Model.” Econometrica 50, no. 1 (1982): 97–109.

Manea, Mihai. “Bargaining in Dynamic Markets.” (2012).

3. Equilibrium Concepts for Games with Imperfect Information  
Sequential, perfect, and proper equilibria

[Game Theory] Chapter 8. 

Kreps, David M., and Robert Wilson. “Sequential Equilibrium.” Econometrica 50, no. 4 (1982): 863–94. 

4. Signaling and Forward Induction  
Stable equilibrium, the intuitive criterion, iterated weak dominance, epistemic foundations

[Game Theory] Chapters 8 and 11.

Kohlberg, Elon, and Jean-Francois Mertens. “On the Strategic Stability of Equilibria.” Econometrica 54, no. 5 (1986): 1003–37.

Cho, In-Koo, and David M. Kreps. “Signaling Games and Stable Equilibria.” (PDF) The Quarterly Journal of Economics 102, no. 2 (1987): 179–221.

Battigalli, Pierpaola, and Marciano Siniscalchi. “Strong Belief and Forward Induction Reasoning.” Journal of Economic Theory 106, no. 2 (2002): 356–91.

Govindan, Srihari, and Robert Wilson “On Forward Induction.” Econometrica 77, no. 1 (2008): 1–28.

5. Repeated Games

[Game Theory] Chapter 5.

Fudenberg, Drew, and Eric Maskin. “The Folk Theorem in Repeated Games with Discounting or with Incomplete Information.” Econometrica 54, no. 3 (1986): 533–54.

Abreu, Dilip, David Pearce, and Ennio Stacchetti. “Toward a Theory of Discounted Repeated Games with Imperfect Monitoring.” Econometrica 58, no. 5 (1990): 1041–63.

Abreu, Dilip, Paul Milgrom, and David Pearce. “Information and Timing in Repeated Partnerships.” Econometrica 59, no. 6 (1991): 1713–33.

Fudenberg, Drew, David Levine, and Eric Maskin. “The Folk Theorem with Imperfect Public Information.” (PDF - 2.0MB) Econometrica 62, no. 5 (1994): 997–1039.

6. Reputation Formation
Reputation with short-lived opponents

[Game Theory] Chapter 9.

Kreps, David M., and Robert Wilson. “Reputation and Imperfect Information.” (PDF - 1.6MB) Journal of Economic Theory 27, no. 2 (1982): 253–79.

Milgrom, Paul, and John Roberts. “Predation, Reputation and Entry Deterrence.” Journal of Economic Theory 27, no. 2 (1982): 280–312.

Kreps, David M., Paul Milgrom, et al. “Rational Cooperation in the Finitely Repeated Prisoners’ Dilemma.” Journal of Economic Theory 27, no. 2 (1982): 245–52.

Levine, David K., and Drew Fudenberg. “Reputation and Equilibrium Selection in Games with a Patient Player.” Econometrica 57, no. 4 (1989): 759–78.

Screening and reputation in bargaining

[Game Theory] Chapter 10.

Gul, Faruk,  Hugo Sonnenschein, and Robert Wilson. “Foundations of Dynamic Monopoly and the Coase Conjecture.” Journal of Economic Theory 39, no. 1 (1986): 155–90.

Abreu, Dilip, and Faruk Gul. “Bargaining and Reputation.” Econometrica 68, no. 1 (2000): 85–117.

7. Supermodular Games

Milgrom, Paul, and John Roberts. “Rationalizability and Learning in Games with Strategic Complementarities.” Econometrica 58, no. 6 (1990): 1255–77.

Vives, Xavier. “Complementarities and Games: New Developments.” Journal of Economic Literature 43, no. 2 (2005): 437–79.

Topkis, Donald M. Supermodularity and Complementarity. Princeton University Press, 1998. ISBN: 9780691032443.

Van Zandt, Timothy, and Xavier Vives. “Monotone Equilibria in Bayesian Games of Strategic Complementarities.” Journal of Economic Theory 134, no. 1 (2007): 339–60.

Immorlica, Nicole, Rachel Kranton, et al. “Social Status in Networks.” (2015).

8. Global Games

Carlsson, Hans, and Eric van Damme. “Global Games and Equilibrium Selection.” Econometrica 61, no. 5 (1993): 989–1018.

Morris, Stephen, and Hyun Song Shin. “Unique Equilibrium in a Model of Self-­Fulfilling Attacks.” American Economic Review 88, no. 3 (1998): 587-­597.

9. Cooperative Games  
Nash bargaining solution, core, Shapley value

Nash, John F. “The Bargaining Problem.” Econometrica 18, no. 2 (1950): 155–162.

 Shapley, Lloyd S. “A Value for n­‐Person Games.”  In Contributions to the Theory of Games, Vol. II. Edited by H. W. Kuhn and A. W. Tucker. Princeton University Press, 1956. 

Manea, Mihai. “Core Tatonnement.” Journal of Economic Theory 133, no. 1 (2007): 331–349.

Non-cooperative implementations

Binmore, Ken, Ariel Rubinstein, and Asher Wolinsky. “The Nash Bargaining Solution in Economic Modeling.” RAND Journal of Economics 17, no. 2 (1986): 176–188.

Gul, Faruk. “Bargaining Foundations of Shapley Value.” Econometrica 57, no. 1 (1989): 81–95.

Perry, Motty, and Philip J Reny. “A Noncooperative View of Coalition Formation and the Core.” Econometrica 62, no. 4 (1994) 795–817.


Course Info

As Taught In
Spring 2016
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