Course Code Computational Game Theory Course LT
MAT3008 Type
Credits 3
Prerequisites Elementary knowledge of Matrices, basic mathematics,
Linear programming problem, etc.
Course Objectives:
The objective of the course is to provide an intermediate course on Game Theory. Game theory is
the science of strategy. It attempts to determine mathematically and logically the actions that
“players” would take to secure the best outcomes for themselves in a wide array of “games.”
Game Theory can be used to analyse the possible outcomes of situations ranging from card games
and sports to strategic price fixing, negotiation, group cooperation. Students will learn to
recognize strategic environments and to use Game Theory to gain a better understanding of
interactions and outcomes within them.
Many of the applications that we will cover will be in the area of economics and management.
However, the theory has been successfully applied to sociology, biology, medicine, political
science, and many other fields, and in the presentations students are encouraged to look at
applications in virtually any of the above areas.
Course Outcomes:
By the end of the course, the students will be able to
Analysis of rational decision models
Knowledge of economic reality
Ability to apply basic mathematical concepts of Game Theory to the economy
Analysis of situations from the perspective of strategic interaction.
Skills to manage information
Abstract thinking
Adaptation and clear understanding of the ideas
Ability to work in teams
Student Outcomes (SO) : a,e,j,k
Module Module Description Hr SO
No. s.
1 Introduction of Game Theory 8 a,e,j,k
Introduction of game theory, Characteristics of games, Basic
terminology, Nash Equilibrium, Illustrations of Nash Equilibrium,
Minimax principles with pure strategies, saddle point, Matrix
reduction by dominance principles, Games without saddle point,
Graphical method for 2×2 games.
2 Two person zero-sum game 9 a,e,j,k
Introduction – Existence of Saddle Point equilibria, Properties of
saddle point, Minimax Theorem, Mixed strategies, Computing Saddle
Point equilibria, Matrix games properties, mixed strategies by Linear
programing method, Illustrations of zero-sum game.
3 Non-Zero-Sum Games 9 a,e,j,k
Introduction - Existence of Nash Equilibrium – Iterated elimination
of strictly dominated strategies - Lemke-Howson Algorithm –
Evolutionary Stable Strategies – Fictious Play - Brown-Von
Neumann- Nash Dynamics - Potential games, Illustrations of non-
zero-sum game.
4 Cooperative and Non-Cooperative Games 8 a,e,j,k
Correlated Equilibria – The Nash Bargaining Problem – Transferable
utility games – The core – Characterization of games with non-empty
core – Shapley Value - The Nucleolus – The Matching Problem,
Repeated games: Folk theorem and repeated prisoner’s dilemma.
5 Extensive Games and Nash Equilibrium 9 a,e,j,k
Introduction to extensive games, Strategies and outcomes, Subgame
perfect Nash equilibrium, Backward induction, Illustrations of
Extensive Games and Nash equilibrium: Stackelberg model of
duopoly markets Ultimatum game.
6 Guest Lectures by experts on contemporary topics 2
Total 45
Mode of Teaching and Learning:
# Class room teaching
# Power point presentations as teaching aid
# Minimum of 2 hours lectures by experts on contemporary topics
Mode of Evaluation and assessment: Digital Assignments, Continuous Assessment Tests,
Final Assessment Test and unannounced open book examinations, quizzes, student’s
portfolio generation and assessment, innovative assessment practices
Text Book(s):
Osborne, M.J. An Introduction to Game Theory, Oxford University Press, 2004
Mas-Colell, A., M.D. Whinston and J.R. Green Microeconomic Theory, Oxford
University Press, 1995
Gibbons, R. A Primer in Game Theory, Pearson Education, 1992
Reference Book(s):
1. PrajitDutta, Strategies and Games, MIT Press
2. Vijay Krishna, Auction Theory, Academic Press.
Recommendation by the Board of 07-11-2019
Studies on
Approval by Academic council on 20-1-2020
Compiled by Dr. Ajay K. Bhurjee, and Dr. Mamta Agrawal
