Decision and Game Theory for Public Managers
2018/2019, Semester 1
Lee Kuan Yew School of Public Policy (Lee Kuan Yew School Of Public Policy)
Modular Credits: 4
This course introduces the main tools of game theory and decision theory through short cases borrowed from the current economic, political and business scene. It examines how these tools might lead us to make better decisions, from both an individual and a collective viewpoint; especially it introduces the biases and mistakes that were documented in the psychological literature, and examine their relevance to decision making. It explores the extent (and limitations) of rationality in individual and collective decision making, and characterizes normatively the outcome of such decisions. Examples from everyday life, sport, military operations or political conflicts will be used to illustrate the reach of game theory and decision theory as tools for strategic analysis.
2018-2019 Semester 1
PP 5144 Decision and Game Theory for Public Managers
Aug 13–Nov 16 2018, Every
2pm–5pm, LKY SR2-1
Omer F. Baris
Wing A, #03-02D
Tuesdays and Fridays, 1:00pm-2:00pm (other times by appointment).
noted that this module syllabus provides a general plan for the module and deviations
This course introduces the main tools of game theory and decision theory through short cases bor-
from the current economic, political and business scene. It examines
these tools might lead us to make better decisions, from both an individual and a collective viewpoint; especially it introduces the biases and mistakes that were documented in the psychological literature, and examine their relevance to decision making. It explores the extent (and limitations) of rationality in individual and collective decision making, and characterizes normatively the outcome of such decisions. Examples from everyday life, sport, military operations or political conflicts will
used to illustrate the reach of game theory and decision theory as tools for strategic analysis.
Student will know about:
The foundations of rational choice
The foundations of social choice
Students will understand:
The fundamentals of strategic thinking
The fundamentals of individual and collective decision making
The determinants of a wide range of economic, political and social interactions
Make better decisions
Make predictions on a more firm ground
Better understand the rationale of interpersonal relations
Better anticipate the possible outcome of economic, political and social interactions
Approach to teaching and learning
The philosophy underpinning this module has been designed to appropriately challenge students and support the achievement of the desired learning outcomes. Game theory is a framework for analyzing strategic interactions between rational goal-oriented actors. Understanding basic game theory is a valuable skill in its
right for policy professionals. It has become an enormously important field of study and a vital methodology for researchers in many disciplines, including economics, political science, public
and law. It helps us predict and understand
people and organizations will behave in response to changes in the policy environment. As such, game theory is one of the tools one might use to think through what policy solutions are likely to come closest to achieving a given policy goal or what policies are implementable in a given political environment. This module will introduce basic concepts and insights of game-theoretic reasoning, along with classic examples and applications, without being
to learn game theory is through examples and
will do so extensively (with practice problems
the course of the semester). The module will guide the student through some prominent applications of game theory with a special emphasis on public
Attendance is required to all lectures. A climate of inquiry and dialog is encouraged between the students and the instructor.
3.1 A personal note
choose to do so,
should use me as a resource. I am more than happy to help. Please, feel free to email me with
regarding the module (topics, lectures, homework problems, exams, etc). Be sure to put the course title in the subject heading so I can prioritize your question. I will make it a point to respond to all course related e-mails within 24 hours.
issues of substance, which require interaction, I
to come in person to
come, please come prepared.
1&2: Individual decision making and social choice.
3: Judgment and choice biases.
to treat statistical data: statistical errors and tips.
5&6: Decisions under risk and
7: Strategic thinking:
8: The strategic use of information.
9: The role of commitments to found credibility and reputation.
to design incentives and contracts.
11: Coordination and cooperation.
12: Bargaining and negotiation.
Attendance and Participation:20%
Illustrative Reading List:
There are many great textbooks on game theory. Some are technical, requiring advanced mathematical skills and reasoning, some are very basic. The following are recommended:
Avinash K. Dixit (Norton).
Thinking Strategically: The Competitive Edge in Business, Politics and Everyday Life
, by Avinash K. Dixit and Barry Nalebuff (Norton).
Making Better Decisions: Decision Theory in
Itzhak Gilboa (Wiley).
Welfare Economics and Social Choice Theory
, by Allan M. Feldman and Roberto Serrano (Springer).
Introduction to Game Theory
Game Theory Ev
Herbert Gintis (Princeton University Press).
Game Theory and Public Policy
Roger A. McCain (Edward Elgar).
and Games: Theory and
Prajit K. Dutta (MIT Press).
, by Giacomo Bonanno. An
textbook on game theory with 165 solved exercises. Available at
website provides a sortable list of books according to levels and disciplines at
in addition to many interesting stuff from lecture notes, dictionary, quizzes & tests to game theory in movies and music, and in news for students, educators, professionals and geeks. I also recommend the following ‘popular’ books that use the logic of game theory:
Nonzero: The Logic of Human Destiny
by Robert Wright (2001, Knopf Doubleday Publishing Group).
The Art of Strategy: A Game Theorist’s Guide to Success in Business and Life
by Avinash K. Dixit, Barry Nalebuff (2008, W.W. Norton).
A Beautiful Mind
Sylvia Nasar (2012,
A Beautiful Math: John Nash, Game Theory, and the Modern Quest for a Code of Nature
by Tom Siegfried (2006, National Academies Press).
Game Theory and the Social Contract, Volume 1 Playing Fair
by Ken Binmore (1998, MIT Press).
Game Theory and the Social Contract, Volume 2 Just playing
by Ken Binmore (1998, MIT Press).
Workload Components : A-B-C-D-E
A: no. of lecture hours per week
B: no. of tutorial hours per week
C: no. of lab hours per week
D: no. of hours for projects, assignments, fieldwork etc per week
E: no. of hours for preparatory work by a student per week