Econ 4010 Syllabus Fall 2015

Current Version August 19 2015

Instructor: Maxim Engers Office: Monroe Hall 230

Phone: 924-3130. Electronic Mail: maxim@virginia.edu Office Hours: Tues 3.30 - 5 pm

TA: Brett Lissenden Electronic Mail: [email protected]du Office Hours TBA

Class Webpage: Available through Collab

Course Goal: To provide a challenging introduction to the most important ideas in game

someone to sell something when the seller doesn’t know how much the potential buyers

are willing to pay?”

Note: If you are not very comfortable with calculus or you do not enjoy solving

problems then this course is definitely not for you. Students have told me that this class

is significantly more difficult than the typical economics class. If you prefer not to take

very challenging classes then taking some other class would be a much better choice.

Accommodations: Any student who feels that he or she may need to discuss individual

accommodations, please make an appointment to see me as soon as possible. If you are

entitled to receive extra time on tests, you should let me know as soon as possible at the

violation of the UVA honor code.

Text: The following book is required:

Martin J. Osborne: An Introduction to Game Theory, Oxford, New York, 2003.

One of the main advantages of the text is that it has many exercises and the author has

made the answers to many of them are available on the web (follow a link at

https://www.economics.utoronto.ca/osborne/igt/index.html

Grading: There will be a midterm and a final exam. Depending on available grading

assistance, between three and six problem sets will be required and they total 20% of

your other scores will be scaled up proportionately. (An adjustment may be made if the

class performance indicates that the test was significantly harder or easier than the other

requirements.) If your excuse is unacceptable your grade will be similarly adjusted, but

you will be subject to a 25 % penalty. Examples of unacceptable excuses are

oversleeping, losing your notes, or having had rehearsals the night before the test.

The midterm will be given in class on October 8.

Final Exam: Because I plan to be out of town during the exam period you will not be able

explaining why you were late and outlining the steps you are taking to make sure that you

will be not be late again. If you don’t, your final grade can be penalized up to three

percentage points for each infraction

Other Sources: Students wanting to try other approaches to the material may find the

following references useful: The books are listed in increasing order of difficulty. The

first two are at a more elementary level than our text, the last two are at a more advanced

level than our text, and the middle book is at about the same level as our text.

Avinash K, Dixit and Barry Nalebuff: Thinking Strategically, Norton 1991.

(When the authors started to revise the book they ended up substantially rewriting it as

An elementary book that applies game theory to business decisions is:

Adam Brandenburger and Barry Nalebuff: Co-opetition, Doubleday, 1996

To do well in 4010 it is more important to concentrate on the topics we cover in

class than to read everything in the textbook. Your class notes should be the best guide

for studying for the exams. If you miss a class you are responsible for getting the class

notes from someone who was present.

Prerequisites: A basic knowledge of calculus and of fundamental concepts of

probability is needed for this course. In particular you need to know how to use calculus

You should be familiar with the formula for conditional probability for one event A given

another event B. You should know what a continuous random variable is and you should

know what a probability distribution function and a probability density function are. As a

check you should be able to answer the following

X

(b) find the expected value of X

3

The bad news is that we will be beginning the semester with a test, to be given

during the first meeting of discussion section. The test is required: If you are absent you

will be dropped from the class. The good news is that your grade will not count towards

your final grade in the course. The exam is designed for your benefit: Its purpose is to

tell you whether you have the background in, and facility with, the mathematics and

statistics that are necessary for success in Econ 4010.

In statistics you should review basic ideas of probability including continuous and

discrete random variables, probability density functions, and (cumulative) distribution

functions. You should check that you know how to calculate the expectation of a

function of a random variable

If you do poorly on the test, I will not force you to drop the class, but I would

strongly advise you against continuing. It would be better to change to a class that does

not use as much math or probability, or wait and improve your math skills before again

trying 4010.

best indicate which students will benefit the most from taking the class. Because of the

number of students who want to add in there will likely be some more challenging

questions on the test. You can’t really prepare for these but just try to be alert and be in

command of your knowledge of calculus, basic probability and intermediate micro.

Reading Guide

The table below gives a rough outline of the topics to be covered and when we plan to

cover them: we may proceed faster or slower than this table indicates. The number in

bold type refers to the chapter of the textbook that deals with the material. Sometimes we

will deal with a topic in much greater depth than the textbook does: these topics are

followed by an asterisk *