EC319 - Syllabus
Game Theory & Auctions
Lent Term 2010
This part of the course consists of a formal and rigorous introduction to classical game theoretical concepts. Both
static and dynamic games are presented. Possible solution concepts and su¢ cient conditions for equilibrium existence
are discussed. Auctions are used as a leading application for the models introduced and the revenue equivalence
principle will be proven in this context.
Lecturer: Francesco Nava, f.nava@lse.ac.uk
O¢ ce Hours: Tue 2:30-3:30pm, Room S482
Course Website: moodle.lse.ac.uk, please enroll to access materials
Time and Location: Tue 13:00 - 14:00, Room D602
Exercises: Problems sets are posted on the website and are due in your class with two weeks lag. The assignment
due on week 10 of LT will be graded for your own bene…t and will cover all materials presented up to week 8 of LT.
Its solution will be discussed in the ST classes.
Weekly Course Program
1. Static Complete Information Games I: De…nitions & Dominance
 Read: Osborne Chapter 1-2
2. Static Complete Information Games II: Pure Strategy Nash Equilibrium & Examples
 Read: Osborne Chapter 2-3
3. Static Complete Information Games III: Mixed Strategies & Nash Equilibrium
 Read: Osborne Chapter 4
4. Static Incomplete Information Games I: De…nitions & Pure Strategy Bayes Nash Equilibrium
 Read: Osborne Chapter 9
5. Static Incomplete Information Games II: Mixed Strategy Bayes Nash Equilibrium
 Read: Osborne Chapter 9 and Lecture Notes
6. Independent Private Value Auctions I: First and Second Price Auctions
 Read: Osborne Sections 9.6.1 & 9.6.2 and Krishna Chapter 2
7. Independent Private Value Auctions II: Revenue Equivalence Principle
 Read: Krishna Chapter 3
8. Dynamic Complete Information Games I: Extensive Form Games and Nash Equilibrium
 Read: Osborne Chapter 5-7
9. Dynamic Complete Information Games II: Subgame Perfect Equilibrium
 Read: Osborne Chapter 5-7
Game Theory and Auctions F. Nava
10. Repeated Complete Information Games: Subgame Perfect Folk Theorem
 Read: Osborne Chapter 14-15
Readings
Most materials covered can be found in the main textbook. I suggest you to get a hold on a copy of this book for the
duration of the course. The slides used in class will be posted. Some readings from the auction theory supplementary
textbook are also suggested and encouraged.
Main Textbook:
[O] “An Introduction to Game Theory”, Osborne, Oxford University Press, 2003.
Complementary Readings
Supplementary Books:
For a comprehensive survey of auction theory, see:
[K] “Auction Theory”, Krishna, Academic Press, 2002
For a classic advanced (more technical) treatment, see:
[M] “Game Theory”, Myerson, Harvard University Press, 1991
Related Papers: Will be suggested upon request to the interested reader.
Examination
The …nal exam will determine your grade on the course entirely. The two parts of the course will be weighted equally.
For my part of the course you will have to choose any two out of three problems. Problems will be weighted equally.
The exam will focus entirely on topics covered in lectures and classes.
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