Game Theory And Strategic Decision-Making

Module description

The module focuses on a theoretical approach that has fundamentally changed economics and political science over the past 20 years, namely game theory. We will study strategic interaction between economic agents (i.e., situations where the outcome of your actions depends on what your rival chooses to do, and vice versa, and where both of you know that to be the case). Examples of the type of situation that will be analysed include: prisoners' dilemma; arms races; the provision of public goods; competition between political parties; and the management of environmental resources.  

Assessment details

2-hour in person written exam (100%)

Educational aims & objectives

• to introduce students to a key analytical approach that has been extensively used in economics and political science, namely game theory

• develop an understanding of how game theory can be used to analyse theoretical, applied and policy problems in political economy

• enable students to make well-informed judgements about the strengths and weaknesses of game-theoretical models

Learning outcomes

By the end of this module, students should be able to:

• understand the notions of ‘strategic interaction’ and of a ‘game’

• understand the normal and extensive form representations of a game

• portray simple cases of strategic interaction in game-theoretic terms either in the normal form or the extensive form, as appropriate

• be familiar with ‘classic’ games such as the prisoners’ dilemma, the assurance game, chicken, and the ‘centipede game’

• be able to solve simple games using methods such as dominance, Nash equilibrium, and backward induction

• understand how game theorists interpret and analyse phenomena such as ‘rationality’, ‘trust’,‘credibility’, and ‘efficiency’

• be aware of the possibility of multiple Nash equilibria and the importance of focal points

• understand how significant real-world situations can be represented using game-theoretic models

• understand the difference between one-shot and repeated games, and the implications of repetition for the range of outcomes that might emerge from strategic interaction

• be aware of the assumptions – in particular, concerning the nature of human rationality – that underpin game theoretic models and be able to make well-informed, critical judgements about the significance and plausibility of those assumptions

Module description disclaimer

King’s College London reviews the modules offered on a regular basis to provide up-to-date, innovative and relevant programmes of study. Therefore, modules offered may change. We suggest you keep an eye on the course finder on our website for updates.

Please note that modules with a practical component will be capped due to educational requirements, which may mean that we cannot guarantee a place to all students who elect to study this module.

Please note that the module descriptions above are related to the current academic year and are subject to change.