Game theory studies strategic interaction in a wide variety of contexts.
Applications include firm behavior in concentrated or oligopolistic markets, the free rider problem or the conditions for the emergence of trust and cooperation in organizations and partnerships, bargaining, and other social situations where individually rational behavior can lead to multiple and socially inefficient outcomes. Information economics and mechanism-design theory extend game theory by asking how changing the rules of a game affects equilibrium outcomes, and therefore the question of how people might choose to set up the rules that organize their interactions. Important insights emerge for understanding a broad class of situations where information is asymmetrically held and where property rights may be contestable. Enrollment limited to 20.