Real Life Games: How Game Theory Shapes Human Decisions
We will explore how game theory, the study of strategic decision-making, can be used to explain and predict human behavior across various contexts. Why are we sometimes willing to pay inordinate sums of money for a wrist-watch that tells the time as well as our phones? What explains feuds and long cycles of retaliation? And what is the best way to take a penalty shot? We will see how behaviors that seems puzzling, bizarre, or even irrational reflect some form of strategic thinking, when viewed through a game theory lens. By analyzing real-world scenarios, we will discover how concepts like Nash equilibrium, cooperation, and competition reveal the underlying logic of human choices.
Lectures
Week 1. Intro
We kick things off by introducing ourselves, followed by a breakdown of the logistics of the course. And then we play our first game!
Slides:
Adrian. Logistics.
Adrian. Can You Guess the Average?.
Week 2. Game Theory Basics
We dive into the basics of game theory. We start by defining what a game is, and then look at key notions: strategies (your game plan), payoffs (what you get out of it), and equilibria (where everyone’s made their move and no one has a reason to change).
Week 3. Mixed Strategies in Penalty Shootouts
We see our first outstanding application: does game theory explain how football players take penalties?
Palacios-Huerta (2014), Chapter 1
Week 4. More Game Theory
We get introduced to more ideas of game theory: evolutionary stability, and games in extensive form.
Week 5. The Hawk-Dove Game and the Emergence of Rights
We learn about the Hawk-Dove game and its role in the emergence of property rights.
Hoffman & Yoeli (2022), Chapter 5.
Skyrms (2014), Chapter 4.
Week 6. Costly Signaling
We learn about costly signals and how it influences art, fashion and rap.
Hoffman & Yoeli (2022), Chapter 6.
Hoffman & Yoeli (2022), Chapter 7.
Week 7. No Lecture Today
Whit Monday.
Week 8. Evidence Gmes
How people treat evidence and decide what to believe.
Hoffman & Yoeli (2022), Chapter 8.
Hoffman & Yoeli (2022), Chapter 9.
Week 9. The Prisoner’s Dilemma and Cooperation
We learn about the dilemma of altruistic behavior through the Prisoner’s Dilemma.
Hoffman & Yoeli (2022), Chapter 10.
Hoffman & Yoeli (2022), Chapter 11.
Week 10. Categorical Norms
We learn about why norms are categorical.
Hoffman & Yoeli (2022), Chapter 12.
Hoffman & Yoeli (2022), Chapter 13.
Week 11. Subgame Perfection and Justice
How our justice sense is influenced by the idea of subgame perfection.
Hoffman & Yoeli (2022), Chapter 14.
Week 12.
Week 13.
Ideas for essays
Bibliography
- Easley, D., & Kleinberg, J. (2010). Networks, Crowds, and Markets. Cambridge University Press.
- Palacios-Huerta, I. (2014). Beautiful Game Theory: How Soccer Can Help Economics. Princeton University Press.
- Skyrms, B. (2014). Evolution of the Social Contract (2nd ed.). Cambridge University Press.
- Hoffman, M., & Yoeli, E. (2022). Hidden Games: The Surprising Power of Game Theory to Explain Irrational Human Behavior. Basic Books.
- Carpenter, J., & Robbett, A. (2022). Game Theory and Behavior. MIT Press.