ECTS - University of Pisa
Scheda programma d'esame
INTRODUCTION TO DECISION THEORY
PIER MARIO PACINI
Academic year2020/21
CourseECONOMICS AND COMMERCE
Code582PP
Credits6
PeriodSemester 1
LanguageItalian

ModulesAreaTypeHoursTeacher(s)
INTRODUCTION TO DECISION THEORYSECS-P/01LEZIONI42
PIERRE DEHEZ unimap
PIER MARIO PACINI unimap
Learning outcomes
Knowledge

The course is meant to introduce the student to the basic theoretical apparatus of decision theory, mainly decisions under risk and strategic decisions (Game Theory). Behavior in games will be analyzed both in the non-cooperative and the coperative framework. The course will provide the main tools and concepts to interpret many economic and social phenomena stemming out of individual and/or group strategic interaction.  
Assessment criteria of knowledge

Online examamination through the Moodle platform
Skills

By the end of the course students will be able to frame situations characterized by exogenous uncertainty or strategic uncertainty coming out of interaction among persons or group of persons in games. The tools that will be introduced will help the student to rationalize and analyze these situations and predict the outcomes on the presumption of indiivdual and group rationality
Prerequisites

The course is meant for a wide public of students both in economics and social sciences. The mathematical tools are kept at the very basic level; however some knowledge of probability theory and of the methods and concepts introduced in a basic course in Microeconomics are highly advised.
Teaching methods

Delivery: on line on the MS Teams platform (LINK)

Learning activities:

  • attending lectures
  • individual study

Attendance: strongly advised
Syllabus

As to individual decisions:

  • Choice strictures. alternatives and criteria (preferences)
  • Certainty, Uncertainty and Risk.
  • Lotteries and preferences over lotteries. Partial ranking of lotteries and optimal decisions.
  • Paradoxes

As to non cooperative games, the basic notion of strategies will be introduced and the concept of a strategic equilibrium will be analyzed :

  • Payoffs and representations of non cooperative games
  • Strategies: pure/mixed, dominant/dominated, rationalizable, best response
  • Equilibrium for non-cooperative games: unicity, multeplicity, absence of equilibria in pure strategies, efficiency.

Bargaining problem:

  • The Nash bargaining problem: representation, solution.
  • Alternative solutions

As to cooperative games (in coalitional form), the basic notion of a characteristic function will be introduced together with key solution concepts, mainly the "core" and "Shapley" value

  • Representation of cooperative games and its properties
  • Imputations
  • Stable allocations: the "core" of a cooperative game
  • The "Shapley" value
  • Applications

 
Bibliography

- Dehez, Pierre (2020), Conflict, bargaining, cooperation and power. An introduction to game theory 

- Resnik, Michael D. (1987) Choices: An Introduction to Decision Theory. University of Minnesota Press

 

Optional readings

- Maschler Michael, Eilon Solan and Schmuel Zamir, Game theory, Cambridge University Press, 2013.

- Osborne Martin, An introduction to game theory, Oxford University Press, 2009.

- Myerson Roger, Game theory, analysis of conflict, Harvard University Press, 1991.

- Rubinstein Ariel et Martin Osborne, A course in game theory, MIT Press, 1994.
  (disponibile: arielrubinstein.tau.ac.il)

 

 FURTHER MATERIAL MAY BE DISTRIBUTED DURING THE LECTURES

 
Assessment methods

Online examination through the Moodle platform
Pagina web del corso

https://elearning.ec.unipi.it/course/view.php?id=1464
Class web page

https://elearning.ec.unipi.it/course/view.php?id=1464
Updated: 13/02/2021 21:07