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2016/2017  KAN-CJURO1011U  Advanced Game Theory and Applied Economics

English Title
Advanced Game Theory and Applied Economics

Course information
Language English
Course ECTS 7.5 ECTS
Type Mandatory offered as elective
Level Full Degree Master
Duration One Semester
Start time of the course Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for BSc/MSc in Business Administration and Commercial Law, MSc
Course coordinator
  • Christina D. Tvarnø - Law Department (LAW)
Main academic disciplines
  • Business Law
  • Economics
Last updated on 12-08-2016
Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors: The students should acquire skills in:
  • acquiring a deeper knowledge of game theory
  • using game theoretic concepts to analyze legal institutions
  • understanding how legal institutions provide incentives for business decisions
  • understanding how social norms provide incentives for business decisions
  • understanding empirical applications of game theory
Course prerequisites
Bachelor in law or economics
Examination
Advanced Game Theory and Applied Economics:
Exam ECTS 7,5
Examination form Written sit-in exam
Individual or group exam Individual exam
Assignment type Written assignment
Duration 3 hours
Grading scale 7-step scale
Examiner(s) Internal examiner and external examiner
Exam period Winter
Aids allowed to bring to the exam Limited aids, see the list below:
  • Approved calculators: HP 10bII+ and Texas BA II Plus
  • Dictionaries (only some, see specification below)
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Description of the exam procedure

This exam consists of five (5) questions. For each question the score is indicated in parenthesis. Every question is divided into sub-questions which count for a certain percentage of the question points. The total maximum score for the exam is 12.
Course content and structure

The course is mainly built around game theory and its applications to legal institutions. The course is divided into 2 parts. In the first part, we go deeper in a set of topics related to cooperative and non cooperative behaviors as analyzed and formalized by the game theory literature. We also analyze the possible solutions to  non cooperative behaviors, both within and outside the legal system (i.e., social norms)

In the second part, the focus is on the empirical analysis of game theory models. We use several papers to provide a broad range of applications.
The course will shed lights on how strategic considerations and quantitative methods complement each other in business decisions.

 
Teaching methods
Lectures with use of clickers to solve exercises and stimulate active participation to each lecture.
Addressing specific questions on the selected papers, to stimulate discussion and get ready for the final exam
Student workload
Lectures 32 hours
Preparation 140 hours
Exam preparation 34 hours
Further Information

Students are required to have a proper knowledge of the concepts in Chapters 1-5, 7, 11, 14-15, 19, 22, 26-27 of Dutta, Strategies and Games: Theory and Practice (The MIT Press, 1999). A basic knowledge of game theory is an essential requirement to be able to deal with a course of Advanced Game Theory.

Students are required to know how to calculate expected values.
Expected literature

1. Baird, D. G., Gertner, R. H., and R. Picker, Game theory and the Law, Harvard University Press, 1994 (ONLY chapters 6, 7, and 8)
2. Ellickson R., Order Without Law. How Neighbours Settle Disputes, 1991
(ONLY part II, pp.127-258)
3. Bernstein L., Opting Out of the Legal System: Extralegal Contractual Relations in the Diamond Industry, Journal of Legal Study, vol.21, pp.115-157, 1992
4. Ashenfelter, O., Bloom, D. E., and G. Dahl, Lawyers as Agents of the Devil in a Prisoner’s Dilemma Game, Journal of Empirical Legal Studies, vol.10, pp.399-423, 2013
5. La Ferrara, E., Kin Groups and Reciprocity: A Model of Credit Transactions in Ghana, American Economic Review, 2003, vol. 93, pp. 1730-1751
6. Garoupa, N. and F. Gomez-Pomar, Cashing by the Hour: Why Large Law Firms Prefer Hourly Fees over Contingent Fees, Journal of Law, Economics, and Organization, vol.24, pp. 458-475
Last updated on 12-08-2016