Advanced Microeconomics: game theory and applications

Objective

The course treats strategic aspects of information in games. The following topics will be studied, among others: value of information, modeling knowledge, modeling inattention, optimal bluffing, betting, reputation, global games, speculative attacks, bank runs, repeated games, information design, congestion games, strategic communication and mediation. Applications to conflict analysis, policy and investment advice, congestion and finance will be discussed.

https://phd-in-economics.com/docs/courses/Advanced%20Microeconomics.pdf

Planning

Course organisation:

Modeling Information and Knowledge

• States of nature and knowledge

• Interactive knowledge

• Beliefs and consensus

Solution concepts for normal form games: minmax, correlated equilibrium, rationalizable strategies

• Zero-sum games and the minmax theorem

• Correlated equilibrium

• Correlated rationalizability and common knowledge of rationality

Value of information

• One person decision problems: comparison of statistical experiments, rational inattention, Bayesian persuasion

• Bayesian Games

• Betting and no-trade theorem

• Repeated zero-sum games, optimal information revelation

Information design and persuasion in games

• Bayes correlated equilibrium

• Belief-based approach under public information

Correlation and information in large games

• Non-atomic games and Wardrop equilibrium

• Network routing games and the price of anarchy

• Potential games

• Correlated Wardrop equilibrium and the value of mediation

• Bayes correlated Wardrop equilibrium

Strategic information transmission

• Cheap talk with transparent motives

• Strategic information transmission with a biased expert

• Mediated communication