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INTRODUCTION TO GAME THEORY

ECO 4400, Section A001; Summer A 2021

Instructor

Professor Eric Schmidbauer

Contact info: Business Administration II Room 302 O, [email protected], 407-823-1204

Office Hours: Monday 1:30 – 2:00pm; Friday 4:30 – 5:30pm

Class Meets: Monday through Thursday, 2:00 – 3:50pm. Online via Zoom

Course Overview

Game theory is the study of strategic decision-making in which one’s own optimal action depends on the actions and beliefs of others. Applications abound in the fields of biology, economics, marketing, law, politics, international relations and war. Accordingly, this course is an interdisciplinary in nature and will systematically study the strategic interaction between competing (or cooperating) agents to gain insights into the aforementioned fields.

By the end of the course students will be able to “solve” a game using game theoretic tools. This includes formalizing a strategic situation into a well-defined game and knowing which analytical tools should be employed to analyze it and predict outcomes. In addition, the student should have an appreciation for the assumptions underlying these tools and their strengths and weaknesses. Finally, part of the learning process will include in-class games.

Prerequisites

ECO 3101 (Intermediate Microeconomics) is a prerequisite for the course. Students should have a full command of basic algebra, an understanding of probability theory1 , and knowledge of calculus (e.g., from ECO 3401 and ECO 3411).

Required Materials

1. Textbook: Dixit, Skeath and Reiley, Games of Strategy, 4th edition, Norton, 2015. This is a reader-friendly introduction to game theory that is easier to follow than most other game theory texts. However, added clarity comes at the expense of extra length, and you should expect to read at least 80 pages a week.2 Note there is a 5th edition of the book but I will be using the 4th.

2. A computer that supports all of the following software.

a. Zoom. All class sessions will be held online using Zoom (download from https://ucf.zoom.us/, click “sign in” and you will be redirected to UCF’s login). I will also hold office hours this way, and you may wish to collaborate with other students through Zoom as well. It is recommended that you first login to Webcourses and then click the Zoom button there. If you access the meeting this way you won’t need to enter a passcode. If you are prompted for a passcode use 501590. Class and office hours link: https://ucf.zoom.us/j/93183012710?pwd=cm5meDM1ZTBMcGZXOXNNcFdUZXNSZz09

b. MobLab. One mode of interaction in the course will be the use of MobLab. Accessible from a web browser at https://www.moblab.com/ or smartphone app, MobLab allows you to play games against other students in class. A typical scenario is as follows: at the beginning of class we will discuss a particular situation and model it as a game. Once the setting is understood we will play the game against each other using MobLab. We will then discuss the results and compare them to the theoretical predictions. You will need to pay a licensing fee of $25 to MobLab for their “MobLab Premier” service. You can get an access code either from the school bookstore or at https://www.moblab.com/ by clicking “Login” and following the prompts. Use class code afmzbarw3 or scan QR code:

c. A web browser that supports the “LockDown Browser” feature in WebCourses, which will be used for online exams. A video describing LockDown browser can be found here, the download is here. To take an exam, you should (i) start LockDown Browser, (ii) log into WebCourses, and then (iii) navigate to the exam.

3. Supplementary readings: other required documents can be found on WebCourses.

Grading

Your grade will be determined as follows.

I will drop your lowest homework score. The grading scale for the course is: 94-100=A, 90-93 = A-, 87-89=B+, 84-86=B, 80-83=B-, 77-79=C+, 74-76=C, 70-73=C-, 67-69=D+, 64-66=D, 61-63=D- and below 61=F.

Homework assignments

The problems will come from the textbook’s end of chapter questions. Each assignment for the course is currently posted in Webcourses and will be due Saturdays at 6pm. Some of those are “Solved Problems,” the answers to which you can find here: http://cdn.wwnorton.com/college/econ/games-of-strategy4e/GoS4-Solved-Exercises.zip. Others are “Unsolved Problems”. Submit your answers to the unsolved problems through the “Assignments” tab in WebCourses. You may work in groups on these assignments if you wish, but each needs to submit your own answers.

Finally, some topics will require prior knowledge on your part, and in such cases I will administer an at home quiz through Webcourses on this topic before using it in class to ensure everyone is up to speed. Such quizzes will count as homework assignments for the purposes of calculating your grade.

Quizzes and a Final Exam

The first day of every week (except the first time we meet!) there will be a quiz covering the content from last week. That content will align with the homework assignment due a few days earlier on Saturday. There will be 5 quizzes, each worth 10% of the course grade. There will be a cumulative final exam worth 20% of the course grade, occurring on the last day of class (June 24). Quizzes and the final exam will be administered online and accordingly you will need a web browser that can support the “LockDown Browser” feature in WebCourses.

There will be no makeup quizzes or exams. If you miss a quiz or exam you will receive a grade of 0. If you know now that you cannot attend each of the exams I advise you to drop the course now.

How to succeed in this course

• Make every effort to attend class. Before each class read the relevant part of the textbook and any supplementary materials. This will ensure you have had some exposure to the concepts and will allow you to raise questions about anything you may not understand.

• Study the course materials and discuss the homework assignments with your group.

• After we have reviewed the homework problems in class go over anything you got wrong. Make sure you understand the correct answer.

• When studying for quizzes and the exam it will be most useful to go over past homework problems.

• Make use of my office hours; I have set aside these hours each week to help students in this class. Do not wait until it is “too late” to seek my help.

Finally, a note regarding the pandemic. Although we will not be meeting in person it is possible that changing circumstances will require me to revise this syllabus throughout the semester.

Other stuff the university forces me to say:

Academic Integrity. Students should familiarize themselves with UCF’s Rules of Conduct. According to Section 1, “Academic Misconduct,” students are prohibited from engaging in: (1) Unauthorized assistance: Using or attempting to use unauthorized materials, information or study aids in any academic exercise unless specifically authorized by the instructor of record. The unauthorized possession of examination or course-related material also constitutes cheating. (2) Communication to another through written, visual, electronic, or oral means: The presentation of material which has not been studied or learned, but rather was obtained through someone else’s efforts and used as part of an examination, course assignment, or project. (3) Commercial Use of Academic Material: Selling of course material to another person, student, and/or uploading course material to a third-party vendor without authorization or without the express written permission of the university and the instructor. Course materials include but are not limited to class notes, Instructor’s PowerPoints, course syllabi, tests, quizzes, labs, instruction sheets, homework, study guides, handouts, etc. (4) Falsifying or misrepresenting the student’s own academic work. (5) Plagiarism: Using or appropriating another’s work without any indication of the source, thereby attempting to convey the impression that such work is the student’s own. (6) Multiple Submissions: Submitting the same academic work for credit more than once without the express written permission of the instructor. (7) Helping another violate academic behavior standards. For more information about Academic Integrity, students may consult The Center for Academic Integrity. For more information about plagiarism and misuse of sources, see “Defining and Avoiding Plagiarism: The WPA Statement on Best Practices.” Responses to Academic Dishonesty, Plagiarism, or Cheating. Students should also familiarize themselves with the procedures for academic misconduct in UCF’s student handbook, The Golden Rule. UCF faculty members have a responsibility for students’ education and the value of a UCF degree, and so seek to prevent unethical behavior and when necessary respond to academic misconduct. Penalties can include a failing grade in an assignment or in the course, suspension or expulsion from the university, and/or a “Z Designation” on a student’s official transcript indicating academic dishonesty, where the final grade for this course will be preceded by the letter Z. For more information about the Z Designation, click here. Course Accessibility Statement. The University of Central Florida is committed to providing access and inclusion for all persons with disabilities. Students with disabilities who need disability-related access in this course should contact the professor as soon as possible. Students should also connect with Student Accessibility Services (SAS) <http://sas.sdes.ucf.edu/> (Ferrell Commons 185, [email protected], phone 407-823-2371). Through Student Accessibility Services, a Course Accessibility Letter may be created and sent to professors, which informs faculty of potential access and accommodations that might be reasonable. Determining reasonable access and accommodations requires consideration of the course design, course learning objectives and the individual academic and course barriers experienced by the student. Campus Safety Statement. Emergencies on campus are rare, but if one should arise during class, everyone needs to work together. Students should be aware of their surroundings and familiar with some basic safety and security concepts. (a) In case of an emergency, dial 911 for assistance. (b) Every UCF classroom contains an emergency procedure guide posted on a wall near the door. Students should make a note of the guide’s physical location and review the online version at http://emergency.ucf.edu/emergency_guide.html. (c) Students should know the evacuation routes from each of their classrooms and have a plan for finding safety in case of an emergency. (d) If there is a medical emergency during class, students may need to access a first-aid kit or AED (Automated External Defibrillator). To learn where those are located, see http://www.ehs.ucf.edu/workplacesafety.html (click on link from menu on left). (e) To stay informed about emergency situations, students can sign up to receive UCF text alerts by going to ucf.edu and logging in. Click on “Student Self Service” located on the left side of the screen in the toolbar, scroll down to the blue “Personal Information” heading on the Student Center screen, click on “UCF Alert”, fill out the information, including e-mail address, cell phone number, and cell phone provider, click “Apply” to save the changes, and then click “OK.” (f) Students with special needs related to emergency situations should speak with their instructors outside of class. (g) To learn about how to manage an active-shooter situation on campus or elsewhere, consider viewing this video. Make-Up Assignments for Authorized University Events or Co-curricular Activities. Students who represent the university in an authorized event or activity (for example, student-athletes) and who are unable to meet a course deadline due to a conflict with that event must provide the instructor with documentation in advance to arrange a make-up. No penalty will be applied. For more information, see the UCF policy. Religious Observances. Students must notify their instructor in advance if they intend to miss class for a religious observance. For more information, see the UCF policy. Deployed Active Duty Military Students. Students who are deployed active duty military and/or National Guard personnel and require accommodation should contact their instructors as soon as possible after the semester begins and/or after they receive notification of deployment to make related arrangements.