Behavioral Game Theory

2018-2019

Course Objective

To get acquinted with behavioral game theory: what is it, what does it
want to accomplish, and can it deliver with respect to the aims it has
set. This includes explaining why observed behavior in experiments
systematically deviates from predictions made by classical Game Theory.
Through performing classroom experiments students will get a more
intense experience of what it means to participate in a game setting, to
better interpret and understand experimental design and develop a
critical attitude towards empirical evidence from experiments.

Course Content

Everywhere people, firms and institutions interact with each other in
many different settings. For instance, negotiations for a contract or
treaty, individuals or firms contributing to a joint partnership,
managers motivating employees. Firms competing on the market, including
web-shops, procurement auctions in B2B for contractors, and art-lovers
competing at Christies. In all cases, the final outcome for each
participant also depends upon the behaviour of others. Each participant
has to deal with the strategic uncertainty about how the others will
behave. Game theory deals with such strategic uncertainty.

For these reasons, game theory has become an influential toolbox in all
branches of Economics, Finance, Management Science and other Social
Sciences. It sometimes serves a normative role for policy advice
(central banks
should be independent), and at other times a descriptive role (keeping
right when
driving is stable and explains reality). There is also substantial
evidence
from experiments and reality that Game theory (and Economic Theory
in general) sometimes makes lousy predictions. This course offers an
inquiry for understanding the discrepancy between theory and reality.
Also,
theoretical developments to resolve this discrepancy need investigation.

The inquiry starts with laying bare the foundations of Game Theory: What
are the driving principles and can these principles be tested in
practice?
What empirical evidence has behavioral economics produced, in particular
for game theoretic experiments. This evidence will be investigated to
establish the discrepancy between theory and reality. Finally,
theoretical attempts to
restore the descriptive power of Game Theory are discussed.

Teaching Methods

Because of the small group size (about 15 students), the format
differs from regular bachelor courses. The course consists of a mixture
of classroom experiments, lectures in which participants and lecturer
interact, presentations, discussions, reading scientific literature.

Method of Assessment

Presentation and a final individual assignment that includes conducting
experiments and writing an
essay.

Entry Requirements

None, except some elementary knowledge of economics and statistics.

Literature

Selected scientific articles that are disclosed through Canvas.

Target Audience

Honours students from SBE, other honours students

Custom Course Registration

SBE rules and dates apply for this SBE HP course. Registration for this SBE HP course is via VUnet.

Explanation Canvas

Canvas

Recommended background knowledge

None

General Information

Course Code E_HP2_BGT
Credits 6 EC
Period P2
Course Level 300
Language of Tuition English
Faculty School of Business and Economics
Course Coordinator dr. H.E.D. Houba
Examiner dr. H.E.D. Houba
Teaching Staff dr. H.E.D. Houba

Practical Information

You need to register for this course yourself

Last-minute registration is available for this course.

Teaching Methods Lecture
Target audiences

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