Game theory studies strategic interaction in a wide variety of contexts.
Applications include the analysis of inter-firm competition in concentrated or oligopolistic markets, the free rider problem or the conditions for the emergence of trust and cooperation in organizations and partnerships, bargaining, electoral competition, and other social interactions. The economics of asymmetric information and mechanism design theory extend game theory to analyze how the terms of a contract or the rules of a game affect outcomes and behavior, and therefore the question of how people might choose to set up the rules that organize their interactions. Topics that can be addressed include the design of auctions, contracts for labor, credit and insurance transactions, tournaments, etc. New York, Norton, 1991. Some additional articles will be distributed in class.