TopPP5143 Games, Decisions and Social Choice
This course introduces the main concepts, methods and paradigm of game theory, decision theory and social choice 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. It explores the extent (and limitations) of rationality in individual and collective decision making; it 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.
1. Student will know about:
The foundations of rational choice
The foundations of social choice
2. 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
3. Students will be able to:
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
Weeks 1 and 2: fundamental tools of game theory;
Weeks 3 and 4: fundamental tools of decision theory;
Weeks 5 and 6 : how unpredictability, as well as a strategic use of information, matter in a context of uncertainty;
Weeks 7: the role of commitments to found credibility and reputation;
Week 8: how incentives and contracts can be designed;
Week 9: coordination and cooperation;
Week 10: bargaining and negotiation;
Weeks 11 and 12: collective decision making and social choice.
Tests: 40 %
Final Examinations: 40 %
Illustrative Reading List:
Avinash Dixit and Barry Nalebuff, Thinking strategically: the competitive edge in business, politics and evryday life, Norton.
Adam Brandenburger and Barry Nalebuff, Co-opetition, Currency Doubleday.
Itzhak Gilboa, Making Better Decisions: Decision Theory in Practice, Wiley.
Thomas Schelling (S), The strategy of conflict, Harvard University Press.